June 29, 2012 / 4:55 PM / 6 years ago

Bitter shareholders put Bankia chief on spot

VALENCIA, Spain (Reuters) - Small-scale investors who lost money in Spain’s biggest banking failure shouted their anger at the head of Bankia (BKIA.MC) in the first shareholder meeting since it applied for 19 billion euros ($24 billion) of state aid.

The headquarters of Spain's lender bank Bankia is seen in Madrid June 29, 2012. REUTERS/Susana Vera

More than 100 investors - some in tears - took turns at a microphone to vent their fury at chief executive Jose Ignacio Goirigolzarri, while 50 others banged pots and blew whistles outside the meeting in Valencia.

Some complained their savings were converted into preference shares without their full understanding, others were angered by the 22 million euros pay for Bankia executives in 2011, a year when the bank restated results to recognize losses of about 3 billion euros.

“I had some savings and I told the lady (at my bank branch) that I didn’t want shares, that I wanted to withdraw my money and she told me it wasn’t possible,” said Elisa Pedros, one of the small shareholders.

“I have an investment in 3,000 shares and only a third of its value remains. What I want to know is where my money went and who is responsible.”

Goirigolzarri who only recently took charge, apologized to investors: “I’m conscious of the loss of value you’ve had in your investments in Bankia in recent months. I’m deeply sorry.”

Formed via a merger of seven savings banks, Bankia raised capital through a share issue last July - attracting about 400,000 investors from all over Spain - since when the shares have lost 75 percent of their value.

A High Court judge is investigating Bankia’s share offer after consumer groups, shareholders and protest groups filed lawsuits demanding a criminal probe into bank executives, the securities regulator and investment bank advisers on the IPO.

    “I want to say I’m sorry to Bankia clients for selling them shares,” said Xavier Capallera, a branch manager who also spoke at the meeting.

    Bankia, whose bailout request forced the government to seek a European rescue package, holds more than 10 percent of deposits in the Spanish financial system.

    The government has taken over seven banks sunk by bad loans to developers in a decade-long property boom that burst during 2007-08, and will get up to 100 billion euros from Europe to heal the sector.

    The Spanish banking rescue pushed the euro zone debt crisis to a new level of anxiety that on Friday forced Germany to allow direct European aid for stricken banks.

    ($1 = 0.7880 euros)

    Reporting by Jesus Aguado; Writing by Fiona Ortiz; Editing by Paul Day and David Hulmes

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