Ex-head of Spain's Caja Madrid accused over Florida bank takeover
Miguel Blesa, 65, who has links to senior members of Spain's governing Popular Party, was held overnight in a Madrid jail and came out on Friday after putting up €2.5 million (HK$25 million) in bail, a prisons service official said.
The former head of Spanish bank Caja Madrid became the first top banker to spend time in jail over alleged mismanagement in the financial crisis.
Miguel Blesa, 65, who has links to senior members of Spain's governing Popular Party, was held overnight in a Madrid jail and came out on Friday after putting up €2.5 million (HK$25 million) in bail, a prisons service official said.
Judge Elpidio Jose Silva said in a written ruling earlier that Blesa presented an "undeniable flight risk" and fixed the bail sum pending investigations of his management of the bank.
Caja Madrid was one of several old regional savings banks, many run by political appointees, that expanded during Spain's building boom and had to be merged after the bubble burst in 2008. The judge is investigating the takeover by Caja Madrid of the City National Bank of Florida, which was caught up in the US subprime mortgage meltdown that year.
The judge said he saw "reasonable indications of criminal responsibility" in that takeover.
Caja Madrid paid US$1.17 billion to take over the Florida bank, about double what it was worth, the ruling said, adding this was a sign of "very bad banking management" that posed "a systemic risk to Caja Madrid in the context of the economic crisis". Prosecutior Luis Pineda said on Friday that the takeover was carried out without authorisation from the relevant authorities. He alleged that managers of the Spanish bank could have pocketed "more than US$100 million in commissions" in the deal.