Friday, Nov 04, 2011
(Updates with comment from Abu Dhabi Invesment Authority in the fifth paragraph)
By David Benoit
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Citigroup Inc. (C) won the arbitration case over Abu Dhabi's $7.5 billion investment in the bank, which the state's giant sovereign-wealth fund had looked to scrap.
Abu Dhabi Investment Authority had alleged in late 2009 that its November 2007 investment had been made on the basis of fraudulent statements by the New York bank, which subsequently required massive government assistance and saw its share price plunge below $2. If the investment could not be cancelled, the Middle East's largest sovereign wealth fund had sought $4 billion in damages.
In its quarterly filing Friday, Citi disclosed it had received last month a final award in its favor on all the claims asserted by Abu Dhabi.
A Citi spokesman declined to comment further than the disclosure. The bank had earlier said the suit was without merit and pledged to "vigorously" defend itself.
A spokesman for Abu Dhabi Investment Authority said "ADIA is disappointed with the decision of the arbitrators and is reviewing its options."
The fund, controlled by the oil-rich rulers of the Persian Gulf city-state of Abu Dhabi, was committed by the deal to buying shares in Citi at $31.83, when they were trading lower than $5. It was among several sovereign wealth funds that helped rescue Citi after it turned to outside investors to replenish capital hit by subprime-mortgage losses in the U.S. The fund also got an 11% dividend for the start of the investment.
-By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com
(END) Dow Jones Newswires
04-11-11 1533GMT
