Abu Dhabi complaint against Citigroup
This is a case that could sink a lot of ink. In November 2007, Citigroup and the fund Abu Dhabi Investment Authority had signed an agreement stating that the obligations acquired by Citigroup fund would be converted into common shares at prices between 31.83 dollars and 37.24 dollars. And, for a total of 7.5 billion common shares at specified times, in 2010 and 2011. At the time, the action Citigroup worth $ 30. But he found the meantime, she collapsed, falling to 3.57 dollars. For funds, it is not an option to repurchase the securities Citigroup eight times their price. ADIA has decided to bring charges against Citigroup for "fraudulent misrepresentation". It simply requires the cancellation of the agreement or the payment of four billion dollars in damages.For its part, the U.S. banking group said in a statement that "these allegations are absolutely baseless and intends to defend against it vigorously."
Third consecutive decline of Citigroup
Yet, according to Richard Bove, an analyst at Rochdale Securities, "there is only a simple argument, which should lead to an agreement. It is in the interest of Citigroup to pay the $ 4 billion. And this, especially since it has 250 billion dollars in cash. For now, it is neither more nor less than a language of the deaf between ADIA, which considers itself cheated and wants to recover his money, and Citigroup, by repaying the funds would cause a precedent that would encourage other investors to be reimbursed. Stay tuned … Shortly before the close, the title recorded its third consecutive decline for the week (-2.53%).Monday and Tuesday, the stock has lost respectively 6.33% and 3.78%.