Vikram S. Pandit, the CEO of Citigroup (NYSE: C), got his start at the big bank by selling them his hedge fund business, Old Lane. A few months after the transaction, Pandit go the top job, but the business he sold Citi is in trouble. How humiliating.
According to The New York Times, "Citigroup said late Friday that it was planning to restructure Old Lane after 'substantially all' its outside investors withdrew their money." The bank bought Pandit's company for $800 million.
Another black eye for the Citigroup board? Absolutely. How can the governance body of a financial firm not look at the key asset that its top CEO candidate brought to the company?
While the news makes Pandit look bad, it makes the Citi board look like boobs. It is essentially the same board that let Chuck Prince stay on too long while he screwed up the bank and let it invest in mortgage-backed paper. Now it has picked a CEO who cannot even do a good job of managing his own investors' money.
Douglas A McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
5-03-2008 @ 1:47PM
Russell said...
Exactly!
5-03-2008 @ 2:49PM
alan said...
If all of the transactions were not actually happening, one would swear it has to be a soap opera.
Sadly, that is what the once great Citi has evolved into. What a disaster. What a CRIME for the shareholder. I just can't understand how both individuals ans institutional holders just sit there and do basically nothing,
The fiasco with OLD LANE is the last straw. Pandit needs to go now before he screws up the company even more.
How much more stock or rediculously priced notes is this clown going to issue to cover the capital shortfall. He is on track to lose as much if not more money than Prince.
The problem is it is OUR money they are playing with. He still is being rewarded ( I calculate Pandit has taken in $ 59 Mil already ) regardless of results. This is corporate MADNESS !!!!!!!!
5-05-2008 @ 8:22AM
maximax said...
As a former employee of Citibank, I am disgusted, hurt and scared of what the future may bring. In years past, come December, we looked forward to profit sharing and the knowledge that we all did a great job (Pride). As long as we did better than the year before. All my (our) hard work has been thrown to the dogs. Where is the pride? We vote for new leadership, but it falls on deaf ears. I voted to get rid of the Accountant, which we have had for at least 25 years and their still there. Like the Government, we need a change. Lets bring back Mr. Wriston, or Mr. Reed. I at least made money then. Right now I'm on the Cannon ball express, and I can't get off! Help.......