Citigroup said in February it had discovered at
least $400 million in fraudulent loans at its Mexico subsidiary
and said employees may have been involved in the apparent crime.
Leach, the bank's head of franchise risk and strategy, is
leading the internal investigation, while Medina-Mora, the
bank's co-president and chairman of Mexico, is spending most of
his time on the probe, the paper said. (http://r.reuters.com/tyn57v)
Both executives are working with the Mexican police, who are
focusing on a lower-level Banamex employee, as well as the
person's co-workers and direct supervisors, people familiar with
the situation told the Journal.
The bad loans were made to Mexican oil services company
Oceanografia, a contractor for Mexican state-owned oil company
Pemex. Oceanografia borrowed from the Mexican unit, Banco
Nacional de Mexico, known as Banamex, using expected payments
from Pemex as collateral.
Citigroup was not immediately available for comment outside of
U.S. business hours.
(Reporting by Mridhula Raghavan in
Bangalore; editing by Richard Pullin)
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