Spanish Court Annuls Re-Opening of Caja Madrid’s Blesa Case

A Spanish court annulled a decision to re-open a probe into a loan made by Miguel Blesa, the former chairman of savings bank Caja Madrid.

The Provincial Court of Madrid overturned the decision last June by the Judge Elpidio-Jose Silva to re-open an investigation into the loan granted by Caja Madrid to Gerardo Diaz Ferran, a former head of the Spanish business lobby who was also a board member of the lender, the court said today in a ruling.

Today’s judgment also affects “other actions” deriving from the probe into the 26.6 million-euro ($35.6 million) loan, the court said, without specifying what those were. Silva sent Blesa, 65, to jail on June 5 as he continues a probe into losses resulting from Caja Madrid’s 2008 purchase of a bank in Florida.

In its ruling, the Provincial Court said that the loan probe had “become a ‘general’ cause to seek those responsible - - it seems Miguel Blesa de la Parra and Gerardo Diaz Ferran -- for the economic crisis we are going through and their punishment.”

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

To contact the reporter on this story: Charles Penty in Madrid at cpenty@bloomberg.net

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

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