(16 August 2006 – India) Citigroup has incurred the wrath of India’s regulator for dealing with a firm which is not allowed to invest in the country.The US bank was fined 10 million rupees (US$216,000) for issuing derivative instruments on Indian securities to a firm prohibited from investing in Indian securities, according to the Securities & Exchange Board of India (SEBI).
“CGMML (Citigroup) filed a statement and it is alleged that despite issuance of ODIs (overseas derivative instruments) to Magnus, they gave an undertaking and declaration which was not true,” SEBI said.
“CGMML is charged with violating the declaration given,” the regulator said.
India stopped overseas corporate bodies from investing in 2001 following a stock scandal that was attributed to such firms manipulating stock prices.