Verdaderos Banksters.
Tarde o temprano, caerán.
Abu Dhabi demands compensation from Citigroup
Abu Dhabi’s biggest sovereign wealth fund has accused Citigroup of tricking it into agreeing to pay $7.5 billion (£4.6 billion) for overpriced stock.
The Abu Dhabi Investment Authority (ADIA) wrote to Citigroup on Tuesday to demand more than $4 billion in damages over a bailout deal struck between the two in November 2007.
Citigroup, which is raising $17 billion from investors to repay its US taxpayer bailout, disclosed the demand on Tuesday night.
The bank said that ADIA had accused it of “fraudulent misrepresentations” during negotiations.
Related Links
Abu Dhabi rides in to rescue Dubai
How Dubai's dream sank in a sea of debt
Sources said that the Abu Dhabi fund believed that the bank’s senior executives withheld information about Citigroup’s dwindling financial strength in order to secure funding.
A spokesman for ADIA said that the sovereign fund would “pursue its legal rights fully”.
He declined to comment further because of a confidentiality agreement with Citigroup.
Citigroup described the allegations as without merit and said that it would defend itself vigorously.
At present ADIA has not taken legal action over its allegations of misrepresentation.
Citigroup’s defenders argue that at the time of the bailout, no one knew how badly banks would suffer as the credit crunch worsened.
ADIA’s aggressive move is unusual for the intensely private fund, which is the biggest of several funds through which Abu Dhabi puts its oil wealth.
By writing to Citigroup during the bank’s capital raising, when the bank must offer full disclosure to investors, the fund ensured that its compensation demand would be made public.
ADIA is estimated to be worth about $700 billion.
But Abu Dhabi, one of the seven sheikdoms of the United Arab Emirates, is spending billions bailing out its neighbour, Dubai.
Abu Dhabi loaned Dubai $10 billion on Monday to prevent Dubai World, a state-owned conglomerate, from defaulting on debt.
The deal with Citigroup will also embarrass ADIA, which has watched other sovereign investors profit from their investments in the bank.
The Kuwait Investment Authority said this month that it made $1.1 billion on the sale of its $4.1 billion bailout stake in Citigroup.
In September the Government of Singapore Investment Corporation made $1.6 billion by selling half of its Citigroup holdings.
Under the 2007 agreement, ADIA paid $7.5 billion for Citigroup convertibles that pay an 11 per cent yield but must be converted into common stock between March 2010 and September 2011.
The conversion will be done in four tranches with the price ranging from $31.83 to $37.24 a share — almost 11 times Citigroup’s current share price.
At midday yesterday, Citigroup shares were $3.50 each.
Citigroup’s shares were trading at about $34 at the time of the deal, which was negotiated by Robert Rubin, the bank’s former chairman.
Michael Klein, the bank’s former co-head of investment banking, negotiated the deal with ADIA.
At the time, Citigroup described ADIA as “one of the world’s leading and most sophisticated equity investors.”
Citigroup went on, however, to be among the companies worst hit by the financial crisis, eventually being saved by two government bailouts.
http://business.timesonline.co.uk/tol/b ... 959597.ece
, pero hay que reconocer que ha tenido razón
y otros para 
:105: