MADRID: Shares in bailed-out Spanish finance group Bankia plunged yesterday, angering small stakeholders who said they were losing out after being cheated into making risky investments in the bank.
Bankia issued ¤11.5bn ($14.8bn) in fresh shares on the Madrid stock exchange yesterday as part of its restructuring after it was nationalised last year.
The new regular shares were issued to replace high-risk investments held by existing Bankia stakeholders.
The bank had promised these stakeholders the new shares would be traded at ¤1.35, but they were down to ¤0.546 ($0.70) in yesterday’s trading on a Madrid market that was up by more than two percent overall.
ADICAE, a campaign group representing the small shareholders, says 200,000 Bankia customers were cheated into converting their savings into shares.
It branded a “fraud” the agreement by the FROB, the government body set up to restructure Bankia. “The shares that Bankia and the FROB forcibly imposed on those affected... at a price of 1.35 euros are actually worth 0.55 at the most,” the group said in a statement yesterday.
It said Bankia customers risked losing three quarters of their investment if they sold their stake. Bankia cited press reports claiming that banks had carried out advance trades in the stocks — known as short selling — affecting the price ahead of yesterday’s launch.
Spain’s stock market authorities said they would investigate the trading of huge volumes of Bankia shares to see if they were legal.
AFP
