Banking Crisis

Abu Dhabi Sovereign Fund Clashes With Citi Over Stock Holding

Tom Burroughes Editor London 16 December 2009

Abu Dhabi Sovereign Fund Clashes With Citi Over Stock Holding

The Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, seeks to end an agreement to buy Citigroup’s stock for more than 8 times its current price, or to receive more than $4 billion in damages if the deal is upheld.

ADIA filed a claim alleging “fraudulent misrepresentations” tied to its agreement to buy $7.5 billion of common stock, Citigroup said.

"The arbitration claim alleges fraudulent misrepresentations in connection with the sale and seeks rescission of the investment agreement or damages in excess of $4 billion. Citi believes the allegations are entirely without merit and intends to defend against them vigorously," the bank said in a statement.

The New York-based bank announced this week that it would sell common shares to help repay $20 billion in bailout funds to the US government. A number of other US banks, such as Wells Fargo, have moved to raise capital in order to repay money under the US Troubled Asset Relief Program.

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