Citigroup's problems mounted yesterday as the Abu Dhabi Investment Authority accused the bank of misleading it over a $7.5bn investment and protests grew over a tax break from the US authorities.
花旗集团(Citigroup)的问题昨日加重。阿布扎比投资局(Abu Dhabi Investment Authority)指控该行误导其进行了75亿美元的投资，围绕该行得到美国当局税收减免的抗议也在增多。
The controversy, which saw Citi's shares fall to a four-month low, engulfed the bank as it tried to raise up to $19.6bn in shares to repay $20bn in federal aid and extricate itself from tough government-imposed curbs on pay and operations.
Citi's stock has fallen by 10 per cent since it announced the capital raising on Monday, increasing the risk that the value of existing shares will be diluted heavily by the new issuance. The offering was expected to be priced after the market closed yesterday.
The Abu Dhabi Investment Authority, one of the world's largest sovereign wealth funds, filed an arbitration claim against Citi, saying it had been misled when it invested $7.5bn in the bank two years ago.
The claim by the sovereign wealth fund alleges “fraudulent misrepresentations in connection with the sale and seeks rescission of the investment agreement or damages in excess of $4bn”, Citigroup said in a statement released late on Tuesday. Citi said the allegations were without merit and it intended “to defend against them vigorously”.
People close to the matter said Adia's unusual move was driven by the losses it stands to suffer under the original investment and frustration at a lack of contact with top Citi management.
Vikram Pandit, Citi's chief executive, has never visited Adia, one of Citi's largest investors, and the last senior manager to do was Sir Win Bischoff, who was ousted as chairman in January, insiders say.
了解内幕的人士表示，花旗首席执行官潘伟迪(Vikram Pandit)从未访问过作为该行最大投资者之一的阿布扎比投资局，最后一位访问那里的高管是温•比肖夫爵士(Sir Win Bischoff)，他已于今年1月被免去董事长一职。
Adia's holding in Citi is in “equity units” currently paying 11 per cent annual income. They convert into common shares, beginning in March next year through to September 2011, and under the terms of the deal the units will be converted at a price of not less than $31.83 per share. Citi's shares are about a tenth of that price. In early afternoon in New York, the stock was quoted at $3.53 – its lowest point since August.
Adia's move underlines the increasingly strained relationship between sovereign wealth funds and the US banks they supported with billions of dollars in capital. Citi also came under fire over a little-noticed decision by the US tax authorities to allow the bank to keep a $38bn tax break.