Investor Wins Appellate Court Victory over Citibank; Lawsuit Could Expose Citibank to Penalties

NEW YORK, June 19, 2017 /PRNewswire/ — An investor accusing Citibank of mismanagement, self-dealing and an attempted cover-up, won a major appellate-court victory in Abu Dhabi this month. The decision will allow the investor to continue to pursue claims which could have a severe impact on Citibank’s business pursuits in the country.

In a May 9, 2017 ruling, the First Commercial Appellate Circuit of the Abu Dhabi Court of Appeal reversed an earlier decision by the Abu Dhabi Commercial Court of First Instance to dismiss the lawsuit because of technical flaws in the form of the plaintiff’s complaint. The appellate court ruled that the complaint was proper in form and substance and sent the case back to the Court of First Instance to be heard by a new panel of judges and a new Committee of Experts.

The investor who filed the lawsuit in November 2014, Dr. Sami Abbas Hussein Ali Al Amri, has accused Citibank of soliciting investments there for years without the required license from the Central Bank of UAE. If that allegation is upheld, the case could result in Citibank’s being exposed to penalties or sanctions imposed by the Central Bank of UAE and also enable other  investors to claim compensation from Citibank for losses suffered on participating in the investment products sold in the UAE over the years, without permission from the Central Bank of UAE.

Dr. Al Amri, the plaintiff, said he was looking forward to a fresh start for his case.

“I am grateful to the judges of the Court of Appeal for having the wisdom to look beyond legal technicalities to the substance of my case and the important issues it raises for all investors who have done business with Citibank in the UAE,” Dr. Al Amri said. “I will continue to seek justice for myself, and I hope that in so doing I may also help prevent other investors from being victimized.”

The lawsuit contends Citi Private Bank (CPB), Citigroup Inc. and Citibank NA:

  • Hid losses from investors in the CReAM (Citi Real Estate Asset Management) Fund, some of whom unknowingly lost their entire investment, for more than three years before sending a one-page letter that stated that previous quarterly reports showing value in the investment had been inaccurate as a result of a “Citi Private Bank operational error.”
  • Purchased two shopping centers in the United Kingdom at questionable values, one of which appears to have been owned by the CReAM Fund’s own manager, without disclosing the “insider” nature of the transaction to investors.
  • Marketed the relevant investments in the UAE, without obtaining the required license from the Central Bank of UAE.

Citibank marketed the CReAM Fund to investors in the GCC countries of the Middle East in 2004 as a medium risk investment projected to yield annual revenues at a rate of 4 percent. From 2004 to 2006, the CReAM Fund invested in 12 shopping centers in the United Kingdom.

However, unknown to investors, the fund’s management company appears to have owned one of the shopping centers, which was sold to the CReAM Fund at questionable values. All of the shopping centers eventually liquidated, costing investors millions of dollars.

Dr. Al Amri lost his entire investment of £1 million, or about $1.29 million. He seeks to recover that amount, plus interest and legal expenses from Citibank.

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