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Pandit stays at Citi, at least for now

Source: PTI
November 24, 2008 18:52 IST
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The job of running crisis-ridden Citigroup is still with India-born Vikram Pandit, who revived the American behemoth's years-old tag line -- Citi Never Sleeps -- but had to seek help worth billions of dollars from the US government to keep the bank afloat.

Over the past week, media was flooded with reports that Pandit was set to lose his job within a year of assuming the office, as he had lost the mandate for steering Citi out of its financial mess.

Till a few weeks ago, Citi was being considered among the last ones standing in the world's biggest economic crisis in the recent times and Pandit was even being commended for successfully turning around the bank.

But a sharp plunge in its share price over the past week to below four dollars, which wiped off more than half of the company's valuation, re-ignited the concerns about the bank's financial health and reports started surfacing that the board and investors wanted Pandit out of his corner room.

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A number of media reports suggested that Pandit was looking at selling the entire bank, or dis-assemble it into pieces to be sold out separately, in his efforts to revive the once-most-valued financial institutions of the world.

However, the state-sponsored bailout of the battered Citigroup reached late last night has not only dispelled the doubts about the very existence of the financial services giant but also put to rest questions on the continuation of its India-born chief Vikram Pandit.

Commenting on the US government's decision to infuse $40 billion of capital and to stand guarantee to troubled assets worth over $300 billion, Pandit said, "We are committed to streamlining our business and providing outstanding banking services to our clients around the world.

He also noted that the company would continue to focus on opportunities and alternatives to further enhance the company's overall position and value. The 51-year-old Pandit had taken over the reins of Citi last year and would complete one year early next month.

Since taking charge, Pandit has announced cutting more than 75,000 jobs at the bank and plans to take its head count to below 3,00,000 in the coming weeks.

Suggesting that he himself might not complete a year as CEO of the group, a recent report in the New York Times said that the Citi executives in a series of tense meetings and telephone calls weighed several options, including whether to replace Pandit or to sell out the assets.

Pandit joined Citi in May 2007, after the financial services major bought his hedge fund -- Old Lane Partners -- for about $800 million. Initially, Pandit was heading the Alternative Investment Group.

Prior to setting up Old Lane Partners in 2005, Pandit, a doctorate in finance, was with Morgan Stanley for about 20 years. Interestingly, Morgan Stanley was till recently being reported to be one of the potential buyers of Citigroup.

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