United States banking firm Citigroup has said it will vigorously defend itself against a claim filed by Abu Dhabi’s sovereign wealth fund seeking four billion dollars over a 2007 share purchase deal.
In a statement released this week, Citigroup said “an arbitration claim was filed against Citi in New York by the Abu Dhabi Investment Authority (ADIA), which purchased equity units from the company in November 2007.”
The agreement obligates “ADIA to purchase a total of $7,5-billion of common equity on specified dates in 2010 and 2011,” Citigroup said.
The acquisitions were stipulated in an accord that saw purchase by the fund of $7,5-billion of securities to be converted into shares with an 11% annual return.
But the share price of what was then the largest bank in the world has fallen from about $30 at the time of the deal to a closing price on the New York Stock Exchange of $3,57 on Tuesday.
The deal still obligates ADIA to pay the equivalent of between $31,83 and $37,24 per share.
The fund is seeking “recission of the investment agreement or damages in excess of four billion dollars,” and accuses Citigroup of “fraudulent misrepresentation”, the US banking firm said in a statement.
“Citi believes the allegations are entirely without merit and intends to defend against them vigorously,” the statement added. — AFP