Pay damages or cancel deal, Abu Dhabi tells Citi

Pay damages or cancel deal, Abu Dhabi tells Citi

 
ADIA had invested US$7.5 billion in Citi in late 2007, providing the much needed capital for the banking entity to tide over its financial crisis. “On December 15, 2009, 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,” Citi said in a statement yesterday.

These equity units make it obligatory for ADIA to buy US$7.5 billion of common equity on specified dates in 2010 and 2011. Citi pointed out that the arbitration claim “alleges fraudulent misrepresentations in connection with the sale and seeks rescission of the investment agreement or damages in excess of US$4 billion.”

Citi also said, it would defend against the claim ‘vigorously’ and believes the allegations are entirely without merit.

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