Reports
Citi Plans Sweeping Boardroom Changes, Announces More Write-Downs
Citi, the embattled banking group in which the
US government has agreed to increase its share stake, has
announced it plans to make sweeping changes to its board of
directors.
“I am pleased to announce today the next step in reconstituting
the Board: the Board unanimously decided to have a majority of
new independent directors as soon as feasible,”
Richard Parsons, Citi chairman, said in a statement.
“The board presently has 15 directors, three of whom have announced that they will not be standing for election at the April annual meeting and two of whom will reach retirement age by the time of the meeting. We are actively conducting a search and expect to announce several new directors shortly."
The fate of Citi, which has booked billions of dollars of
write-downs from the credit crunch, and has agreed to spin off
its Smith Barney wealth advisory business to Morgan Stanley,
continued to hang in the balance. The
US government has agreed to a third rescue attempt that will cut
existing shareholders’ stake in the firm by 74 per cent. Shares
in Citi fell sharply on Friday.
The Treasury Department agreed to convert as much as $25 billion
of preferred shares into common stock as long as private holders
agree to the same terms, the government said in a statement last
week. The
US government does not immediately intend to inject additional
money after channelling $45 billion to the New York-based company
last year.
In another statement last Friday, Citi said it recorded a pre-tax goodwill impairment charge of about $9.6 billion ($8.7 billion after-tax) in the fourth quarter of 2008.
Citi had previously announced in its fourth quarter earnings press release on 16 January that it was continuing to review its goodwill to determine whether a goodwill impairment had occurred as of 31 December, 2008, and that charge is the result of that review and testing.
The goodwill impairment charge was recorded in North America Consumer Banking, Latin America Consumer Banking, and EMEA Consumer Banking, and resulted in a write-off of the entire amount of goodwill allocated to those reporting units.
