13 July 2012
On 4 July 2012, the Central Examining Court No. 4 of the National High Court issued an order opening Preliminary Proceedings No. 59/2012 and admitting for processing the complaint filed by the ‘UNIÓN, PROGRESO Y DEMOCRACIA’ (UPyD) party against the companies BANKIA, S.A. and BANCO FINANCIERO Y DE AHORROS S.A. (BFA), as well as against the directors of both entities, for the alleged commission of the following crimes: fraud, misappropriation, falsification of annual accounts, fraudulent or disloyal administration, and scheming to alter the price of things.
In the complaint filed, it is understood that the aforementioned offences were committed during the process of the formation of Bankia and its subsequent flotation on the stock exchange. As is well known, Bankia’s share price has plummeted in recent months, making it necessary to nationalise and rescue the institution, following the dismissal of its Chairman and the entire Board of Directors.
On the one hand, the complaint refers to the Public Offering Prospectus, which provided information on the group’s interim financial statements as of 31 March 2011, supplemented by additional pro forma information based on assumptions and projections. The issue was authorised by the CNMV, and Bankia was floated on 20 July 2011. According to the complaint, the information provided to investors, describing Bankia as a highly solvent group with excellent future prospects, could constitute deception typical of the offence of fraud.
In addition, in the first half of 2012, the Board of Directors presented annual accounts for 2011 showing a profit of 309 million euros. These accounts were audited by the auditing firm Deloitte, which refused to deliver a clean report, as it considered that they did not reflect a true and fair view of the entity’s economic and financial situation. Following the auditors’ approach, the resignation of the Chairman and the resignation of the entire Board of Directors, the incoming Board of Directors proceeded to restate the 2011 accounts, now with the approval of the auditors, presenting financial statements that showed a loss of 2,979 million euros.
The huge difference between the accounting information presented by the previous management team and the current one suggests that the elements of a crime of falsification of annual accounts for the financial year 2011 could be present.
At the same time, according to the plaintiff, the facts could constitute other crimes such as fraudulent or disloyal administration, and scheming to alter the price of things.
Likewise, on 10 July 2012, the judge of the National Court, Fernando Andreu, admitted the complaint filed by the 15-M citizens’ movement and decided to join it to the complaint previously filed by UPyD due to a “substantial identity” between the alleged facts.
