INSIGHT-Citi's Banamex, regulator clash over who played key role in loan fraud

lunes 21 de julio de 2014 01:00 GYT

By Elinor Comlay, Alexandra Alper and David Henry

MEXICO CITY/NEW YORK, July 21 (Reuters) - Preliminary findings of a probe by Citigroup's Mexican unit, Banamex, into how it lost more than $500 million in a corporate loan fraud differ markedly from the results of a separate investigation by the Mexican banking regulator.

Banamex has zeroed in on Jose Ortega, a middle manager the bank fired in 2012, as a key person in the fraud involving Mexican oil pipeline maintenance company Oceanografia, according to two people familiar with its probe.

But the Mexican bank regulator, Comision Nacional Bancaria y de Valores (CNBV), has poured scorn on this suggestion and says Ortega probably played only a bit part. The real problem was with the bank's institutional failure to have proper controls in place, the CNBV says.

Reuters has learned that Banamex accuses Ortega of changing a manual that employees used when deciding whether to make loans to suppliers to Mexico's state-owned oil company Pemex. That meant Banamex staff stopped calling Pemex to verify invoices, reducing their level of scrutiny of loans to Oceanografia and other suppliers, the people familiar with the probe said.

Because Citigroup has different lending protocols for different types of borrowers, employees are expected to follow steps in manuals to safely make loans to clients. Ortega, who was in charge of lending to companies that supply services to Pemex, was the only employee at his level entitled to edit the Pemex manuals, the two sources familiar with the bank probe said. Reuters couldn't independently verify whether or not Ortega had altered the manuals.

The bank fired Ortega in 2012 for having an outside business relationship with Oceanografia, creating a conflict of interest, because it discovered he had received $200,000 from the company's CEO Amado Yanez, one of the sources said. Reuters could not ascertain what the arrangement was between Ortega and Oceanografia.

Ortega told investigators at the time that the payments were for his wife, a fine art dealer who had sold art and property to Yanez, the source said. Ortega went to work for Oceanografia as a consultant after being fired by Banamex, the source added.

Ortega could not be reached for comment. One lawyer said he has been in touch with Ortega, adding that the former Banamex employee has not selected legal representation. That lawyer said he passed along Reuters' request for comment but Ortega did not respond.   Continuación...