Citigroup was sued for fraud by investors and creditors of a bankrupt Mexican oil services firm over claims they were harmed by a loan scheme that also led the bank to cut 2013 profit by $235m and fire at least a dozen people.
Bloomberg News reports that Citigroup’s loans led to the 2014 collapse of the Mexican firm, Oceanografia SA, and caused Rabobank Groep, with investors and creditors, to lose at least $1.1bn, according to the lawsuit filed Friday in Miami federal court.
Rabobank and other investors separately filed a negligence suit in Delaware state court against auditor KPMG LLP.
Citigroup’s Mexican subsidiary, Banamex, made short-term loans to Oceanografia, which did work for state-run Petroleos Mexicanos, or Pemex. In turn, Pemex repaid the bank. Citigroup Chief Executive Officer Michael Corbat said in February 2014 that $400m of accounts receivable from Oceanografia were fraudulent. He said the bank was working with Mexican authorities and would find out “who perpetrated this despicable crime.”
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