Spain Judge Jails Ex-Bank Chairman During Florida Probe

A Spanish judge ordered Miguel Blesa, the former chairman of Caja Madrid, back to jail as legal probes into losses at the country’s banks intensified.

Judge Elpidio-Jose Silva ordered Blesa, 65, be detained without bail, a spokesman for a regional court in Madrid said by telephone today. Silva has been investigating the cost of Caja Madrid’s purchase of City National Bank of Florida in 2008, a deal that may have caused losses of 500 million euros ($655 million), he said in a ruling last month.

Caja Madrid was merged with Bancaja and five other savings banks in 2010 to form Bankia. The banking group needed a 22 billion-euro rescue last year that forced Spain to seek bailout funds from Europe to salvage the industry.

Blesa spent a night in Madrid’s 1,008-cell Soto del Real jail in May before he was freed on 2.5 million euros bail.

Carlos Aguilar, a lawyer for Blesa, wasn’t immediately available to comment on his detention when contacted by Bloomberg News today.

Bankia agreed to sell City National to Chile’s Banco de Credito e Inversiones for $882.8 million last month. It had bought 83 percent of the bank for $927 million five years ago before buying more shares.

To contact the reporters on this story: Charles Penty in Madrid at cpenty@bloomberg.net; Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net

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