Citigroup faces €59mn lawsuit over abandoned property IPO

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UK-based investment firm Citigroup is facing a €59mn lawsuit after a Wall Street bank accused it of giving “misleading” and “inaccurate” advice when working for a public listing.

Alsimos, which sought to raise capital to invest in the Greek property market, said in 2018 that Citibanks lost tens of millions of euros in payments after the company’s management misled investors about their interest in an IPO.

Citi has denied the allegations in papers filed at London’s High Court and seen by the Financial Times.

The lawsuit alleges that Alcimos organized Citi in late 2017 to hold pre-investor meetings and provide feedback to the company about a possible stock sale in a special purpose vehicle.

Alcimos said Citi had misrepresented to management that some investors were not interested in backing the listing. It is said that these same investors have directly informed the company that they are interested in participating in the IPO.

Citi, who argued that there is not enough investor support for the proposed IPO to be implemented, denied that the level of investor interest was wrong.

The lawsuit is an unwanted distraction for City, which is looking to move on from several high-profile mistakes in recent years. Last year the bank was fined 135.6 million dollars It has been fined £62mn in the UK for failing to fix long-standing problems with risk management and data management in the US.

In emails cited in court documents, Citi’s top trader Linos Lekas, who retired last year, apologized to Alsimos management for “an inconsistency in the messaging we inadvertently put into our presentation or communication” before ending the call. The relationship between companies.

Alcimos then replaced Citi with Barclays in May 2018, but said “the need to explain Citi’s inaccurate investment feedback and Citi’s replacement negatively impacted all investors’ sentiment toward the proposed IPO.”

Finally, he left the listing because the downturn in market conditions meant there was “no longer enough investment demand.” Alsimos, which had hoped to raise up to €250mn, canceled its IPO and sued for €58.6mn “in losses and damages”. CT disputed this.

In its defense filing, Citi said there is “insufficient investor interest to proceed with the proposed IPO” and that “the deal may not proceed if smaller hedge fund investors are willing to participate or if commitments from larger investors are insufficient.” He said.

The bank said it had agreed to coordinate early investor meetings for the deal, dubbed “Project Letter,” but had not entered into a “legally binding agreement” to act as the sole global coordinator.

According to Companies House records, Alsimos was placed into liquidation in October following a petition from its creditors.

The case has been handed over to an official receiver, part of the UK government’s Insolvency Service, who will now take charge of the company’s affairs and investigation, a person familiar with the matter said. A spokesman for the authority’s receiver said it did not comment on “ongoing matters”.

Separately, Alsimos’ sister company has been developing and raising litigation funds for the past year. Claims Coordinator For investors frustrated by the failure of Greenseal Capital.

CT declined to comment.