Argentina takes Citi to court over US deal

 
Joseph Millis
ARGENTINA yesterday launched legal action against Citibank Argentina for striking a deal with a group of US creditors fighting the government over unpaid debt.

The announcement by Axel Kicil­lof, the country’s economy minister marked a fresh low in deteriorating relations between it and the bank.

Citibank Argentina, a subsidiary of Citigroup, found itself at the centre of a lengthy court battle after the government demanded it process interest payments on exchanged debt, in defiance of US court orders.

The bank last month agreed with the litigating investors not to appeal against the court’s injunction block­ing Argentina’s payments if it was allowed to process two one-off transfers in March and June to help it quit its local bond custody business.

But Kicillof said this “violated and inter­fer­ed with regulations govern­ing our public debt”.

A Citigroup spokesperson told City A.M.: “We are disappointed about the announced judicial actions expected to be taken by the government… Citi has acted in accordance with all applicable laws and will respond to these actions in due course.”

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