MADRID - Former IMF chief Rodrigo Rato faces court Thursday over fraud charges linked to the collapse of Spanish lender Bankia, a dramatic fall from grace for a high-flier once touted as a future prime minister.
Rato has been called to testify at Spain's National Court, which opened a case against him and 32 other officials from the bailed-out bank, now a symbol of calamity in the financial system.
The 63-year-old financier resigned from the bank in May just before the lender was nationalised and bailed out.
The 23.5 billion euro ($29.5 billion) bailout announced by the Spanish government for the lender on May 9 marked a new phase in Spain's banking crisis. It drove the banking sector to seek up to 100 billion euros in eurozone rescue funds for its finance sector.
The court accepted a suit brought by the centrist opposition Union, Progress and Democratic party (UPyD) targeting Rato and 32 other senior members of the bank, as well as its parent company BFA.
Court papers listed criminal charges including fraud, embezzlement, falsifying accounts and price manipulation. The hearing is closed to the public and the press.
Anti-corruption judges had already opened a preliminary investigation into alleged fraud relating to Bankia's founding in 2010 and stock listing the following year. It was created by merging seven regional savings banks.
The lawsuit by UPyD was one of four cases brought by bodies including the far-right organisation Manos Limpias and two social protest groups, Democracia Real Ya and a movement popularly known as the "indignants".
Rato is one of the most prominent financial figures in Spain. He served as economy minister between 1996 and 2004 and then as managing director of the International Monetary Fund until 2007.
On July 20, 2011, Ratio seemed to be riding high as he gave the thumbs up, smiling broadly, on the day Bankia shares began trading on the Madrid stock exchange.
"It was certainly a very emotional day for him because he comes from a family of bankers," said Carmen Gurruchaga, journalist and author of a book of interviews with the financier, who is a hero of the Spanish right.
But his moment of triumph was brief.
A descendant of northern Spanish industrialists, born into a wealthy family, Rato has now become the target of popular anger, a symbol of the problems of a financial system too closely linked to politics.
Often described as brilliant and as a fine orator, but also sometimes as pretentious and even rude, his career had seemed faultless until he entered the world of Spanish banking.
Rato, a law graduate with an MBA from Berkley, was praised as an excellent economy minister, a post he held under conservative Popular Party prime minister Jose Maria Aznar, who ruled from 1996-2004.
Aznar said recently he had viewed Rato as his "natural successor" to lead the party and, perhaps, the country.
But Rato's political status changed after he opposed the US-led Iraq war, which Aznar supported.
Nevertheless, his career outside politics shone and he became the first Spaniard to lead the IMF in 2004, resigning in 2007 before the end of his mandate for "family reasons."
His return to Spain ahead of 2008 elections sparked rumours of a possible tilt at the party's leadership.
But Rato insisted he had no further political ambitions and instead secured the top job in Caja Madrid before presiding over a series of mergers and the Bankia listing, which would end in scandal and fiasco.
In July, Rato defended himself before parliament.
"The whole process was controlled by the regulator," he told a parliamentary hearing, adding it was also overseen by "prestigious experts" from accounting firms Deloitte and PricewaterhouseCooper.
"The process was transparent and rigorous," he added.
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