Wednesday, March 25, 2015

'Agreement between Citigroup, vulture funds breaks Argentine law'

Economy Minister Axel Kicillof has fiercely criticised Citigroup for reaching a “secret” agreement with vulture funds, asserting that the banking giant would be investigated and possibly sanctioned for its actions.

Citigroup decided not to appeal a US ruling blocking Argentine bond payments after reaching a “secret” agreement with holdout investors suing the country over its defaulted bonds more than a decade ago, in order to wind up its custody business for debt services.

Speaking for more than 40 minutes and later responding to reporters' queries, Kicillof urged Citigroup to abide by the law of Argentina.

“Citi has a branch office that operates in Buenos Aires, which is registered as a branch office of a foreign company, which is strictly subjected to Argentine laws,” the minister said. “If they have a license here they have to obey first, above all, the authorities of Argentina.”

“It seems that [Citigroup] is trying to evade the Argentine law, paying attention to (US Judge Thomas) Griesa when Griesa was forcing it to break the law, and at the same time favouring vulture funds,” Kicillof insisted adding that the agreement could account for “fraud” as the financial entity will not guarantee bondholders collecting their money, “seeking to not be implicated in any crime but favouring vultures, being friends with God and the Devil.”

Kicillof’s statements come as the government continues to demand the bank handle a March 31 payment or else risk sanctions, including the possible loss of its operating license.

In the agreement reached with the hedge funds, Kicillof explained, Citigroup “has dropped the appeal,” posing a “problem for the whole financial system."

"The Citibank is making an arrangement with speculative funds to damage the country," the minister affirmed as he announced he will be informing the Central Bank, the National Values Commission (CNV) and the Office of the Inspector General of Justice “the situation of this bank which will condition its activity in Argentina.”

Kicillof clarified that no action would be taken from his ministry, as the case does not fall under its remit. The minister, however emphasised the importance of taking action.

"This is in the national interest, because if the bank throws its clients into the bins it is breaking the law," he said.