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Citigroup is going through a €59mn lawsuit that was launched by a UK-based funding agency alleging that the Wall Road financial institution supplied “deceptive” and “inaccurate” recommendation when working for it on a potential public itemizing.
Alcimos, which wished to lift capital to put money into the Greek property market, alleged that it misplaced out on tens of tens of millions of euros in charges after Citi bankers misled the agency’s administration about investor urge for food for the IPO in 2018.
Citi has denied the allegations, that are contained in papers filed at London’s Excessive Court docket, and have been reviewed by the Monetary Occasions.
The lawsuit centres on Alcimos participating Citi in late 2017 to organise and conduct early investor conferences a couple of potential sale of shares in a particular function automobile and supply suggestions to the corporate.
Alcimos claimed Citi inaccurately informed its administration that sure buyers weren’t occupied with supporting a list. It alleged that the identical buyers had straight informed the corporate that they had been probably occupied with taking part within the IPO.
Citi, which argued that there was not sufficient investor assist to make the proposed IPO viable, denied that it misrepresented the extent of investor curiosity.
The lawsuit is an unwelcome distraction for Citi, which is searching for to maneuver on from a number of high-profile blunders lately. Final yr, the financial institution was fined $135.6mn within the US for failing to appropriate long-standing issues in threat management and information administration, and was handed a £62mn penalty within the UK for failing to forestall a fat-fingered $1.4bn buying and selling error.
In emails referenced in court docket paperwork, Linos Lekkas, a senior Citi dealmaker who retired final yr, apologised to Alcimos’s administration for “any inconsistency in message communication that we could have inadvertently included in our presentation or conveyed throughout any of our calls” earlier than terminating the connection between the businesses.
Alcimos then changed Citi with Barclays in Might 2018, however claimed that “the necessity to clarify Citi’s inaccurate funding suggestions and the substitute of Citi all negatively affected investor sentiment for the proposed IPO”.
It finally deserted the itemizing as a result of deteriorating market situations meant “there was now not ample funding urge for food”. Alcimos, which had hoped to lift as much as €250mn, alleged that it “suffered loss and damages” of €58.6mn because of scrapping the IPO. Citi disputed this.
In its defence submitting, Citi stated there was “inadequate investor urge for food to proceed with the proposed IPO” and that the deal “couldn’t proceed if solely smaller hedge fund buyers had been prepared to take part or if the commitments from bigger buyers had been comparatively small in dimension”.
The financial institution additionally stated whereas it had agreed to co-ordinate early investor conferences for the proposed deal, dubbed “Venture Alphabet”, it by no means entered right into a “legally binding settlement” to behave as sole world co-ordinator.
Alcimos was positioned into liquidation in October following a petition from a creditor, based on Corporations Home filings.
The case has been handed on to the Official Receiver, a part of the UK authorities’s insolvency service, which is now liable for dealing with the affairs of the corporate and the liquidation, based on an individual conversant in the matter. A spokesperson for the Official Receiver stated it didn’t touch upon “ongoing instances”.
Individually, Alcimos’s sister firm, which specialises in arranging and sourcing litigation funding, final yr co-ordinated a claim for buyers who had been stung by the collapse of Greensill Capital.
Citi declined to remark.
