Argentina Sues Citigroup over Debt Repayments

LATIN AMERICA AND THE CARIBBEAN, 18 May 2015

Agence France-Presse – The Guardian

Bank says some employees of Citi Argentina could face criminal charges due to court battle between South American nation and US hedge funds.

Argentinian officials have since late March ‘taken certain adverse actions against Citi Argentina, including filing a lawsuit against Citi Argentina and instituting a suspension of certain activities’. Photograph: Justin Lane/EPA

11 May 2015 – Citigroup has said it has been sued by Argentina and that some employees could face criminal charges there due to a court battle between the South American nation and US hedge funds.

Argentinian officials have since late March “taken certain adverse actions against Citi Argentina, including filing a lawsuit against Citi Argentina and instituting a suspension of certain activities”, the US bank said in a filing with the Securities and Exchange Commission.

Additional potential sanctions include “the loss of licences to operate in Argentina and criminal charges against bank employees”, Citigroup added.

Citigroup’s travails come amid longstanding litigation between Argentina and US hedge funds NML Capital and Aurelius Capital Management, which did not accept a restructuring deal of Argentinian debt. The funds seek $1.3bn (£830m) from Argentina.

US district court judge Thomas Griesa has repeatedly backed the funds’ campaign to attain full debt repayment, ruling that Buenos Aires cannot make payments on the restructured debt to other creditors until it pays the so-called “holdout” hedge funds first.

On 12 March Griesa barred Citigroup from handling payments as the custodian of Argentinian bonds. The bank, the nation’s fourth-largest by assets, subsequently announced plans to exit the Argentinian custody business.

After Citi’s announcement, Griesa permitted the US bank to handle two more payments of interests as custodian while it exits the business.

However, Argentina has dismissed the US holdouts as “vulture” funds and essentially ignored Griesa’s rulings.

In late March, Argentinian regulators blocked Citibank Argentina from conducting capital market operations. Argentina’s central bank also suspended the head of Argentina’s Citi operations, Gabriel Ribisich, accusing him of misconduct.

Citi said in the SEC filing that “the situation continues to evolve and may result in additional negative consequences to Citi’s franchise in Argentina, some of which could be significant”.

MORE:

US vulture fund ruling pushes Argentina towards second bankruptcy

Go to Original – theguardian.com

Share this article: email mastodon facebook 🔗 copy link

DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.

Comments are closed.