Mexican investigators clears Citigroup employees from Oceanografia fraud probe

According to unnamed government officials in Mexico, employees of Citgroup Inc's Banamex unit had been questioned by authorities about vital information to aid them in an ongoing investigation on Oceanografia SA. Oceanografia, which provides maintenance and support services for oil projects offshore, came under fire for allegedly duping Citigroup regarding the collateral the former used to back up loans it obtained from the bank. Bloomberg said that the company's credit lines had been frozen following the seizure of the company by the government of Mexico for alleged fraudulent transactions.

Citigroup had played a key role in the probe on Oceanografia when the former reported a $360 million pretax loss on loans to the latter against nonexistent collateral. At the moment, the country's financial ministry is running the oil project services provider.

It has been noted in regulatory filings that prior to the troubling report by Citigroup, Oceanografia Chief Executive Officer Amado Yanez controls 80% of the company and has been running it since 1994. Yanez has yet to be accused but a series of tweets denoted the CEO's will to fight back against claims that he had a hand in the fraud.

Bloomberg quoted Citigroup, who said on February 28 that it had redcued its profit last year by $235 million after a thorough investigation on its short-term credit to Oceanografia lead to a large discrepancy. As it is expecting to receive money as repayment to the loan from payments made by state-owned oil company Petroleos Mexicanos, or known as Pemex to Oceanografia, Citigroup found that only $185 million worth of collateral that backed Oceanografia loans worth $585 million could be verified.

Meanwhile, an unidentified source told Reuters yesterday that the US Securities and Exchange Commission is at its early stages of investigation to find potential violations of the Foreign Corrupt Practices Act. Citigroup might have made with regard to the loans it extended to Oceanografia.

Tags

Oceanografia SA, Citgroup Inc

© 2023 Lawyer Herald All rights reserved. Do not reproduce without permission.