Spanish consumer group sues EU body over Banco Popular rescue

Reuters




MADRID, July 31 (Reuters) - A Spanish consumer group
representing some of the small shareholders in failed Banco
Popular said on Monday it had filed a lawsuit against the EU
body which orchestrated the lender's sale and rescue, demanding
the operation be annulled.
    European authorities stepped in to arrange a swift rescue of
   Spain'sBanco Popular in early June, saying it was on the
verge of collapse after a bank run. [nL8N1J40WQ]
    Popular was sold overnight to larger rival Santander
<SAN.MC> for a nominal one euro, in a deal that caused losses
for shareholders and was the first test of a new, tougher
European Union regime to deal with troubled banks.
    Consumer group Adicae, which has led several legal battles
in Spain against practices in the banking sector, said it had
lodged a claim with the European Court of Justice against the
EU's Single Resolution Board (SRB) for triggering the rescue.
    Adicae said it considered the operation to be untransparent
and arbitrary and added there was no clear public evidence that
Popular was no longer viable.
    The SRB was not immediately available to comment. Santander
declined to comment.
    Various investor groups have been trying to pursue former
members of the bank's management through the courts over
Popular's demise, though it is not yet clear how many lawsuits
will prosper and what financial damages might be involved.
[nL8N1J93OB]
    Bondholders also suffered losses through the deal.
    The rescue was technically carried out in Spain by the
country's bailout fund, known as FROB, at the behest of the EU.
    Adicae - which says it is working with several thousand
consumers affected by Popular's rescue, including clients who
owned some of the shares that were wiped out - said on Saturday
that Spain'sHigh Court had accepted its claim against the FROB.

 (Reporting by Sarah White, Additional reporting by Francesco
Guarascio in Frankfurt, editing by David Evans)
 ((sarah.white1@thomsonreuters.com; + 34 91 585 2115; Reuters
Messaging: sarah.white.thomsonreuters.com@reuters.net))

Keywords: BANCOPOPULAR M&A/INVESTORS






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