NEW YORK, April 27, 2015 /PRNewswire/ -- Citibank this
month lost a key decision in its defense of a lawsuit in
Abu Dhabi accusing the bank of
self-dealing, defrauding investors, and attempting to cover-up
investor losses.
The Abu Dhabi Commercial Court of First Instance on April 14, 2015 determined the lawsuit should
proceed and ordered the appointment of a Committee of Experts to
review evidence and determine Citibank's culpability.
The Court's decision is a critical and important step in the
plaintiff's attempt to ensure that Citibank will be held
responsible for defrauding its investors, and the attorneys
representing the plaintiff are looking forward to presenting the
evidence to the Committee of Experts.
Investor Dr. Sami Abbas Hussein
Ali sued Citibank and related entities in November 2014. The lawsuit contends Citibank
International PLC, Citi Private Bank, and Citi Private Bank –
Abu Dhabi:
- 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.
- Failed to obtain required approvals from the Central Bank of
the United Arab Emirates to
solicit investments from investors in that country. Under UAE law,
investments marketed to investors in the country without the
required approvals are null and void.
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, which
was managed by David Lockhart of the
Halladale Group Plc, invested in 12 shopping centers in the
United Kingdom.
However, unknown to investors, Mr. Lockhart's employer,
Halladale, 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.
Mr. Lockhart, through a new entity known as New River, in 2008
purchased the assets of CReAM Fund at distressed prices. Again,
none of the proceeds went to the original investors.
"Citibank, Halladale Company and Mr. Lockhart achieved huge
profits…at the time the Plaintiff lost all the invested money,"
according to the lawsuit.
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SOURCE Dr. Sami Abbas Hussein
Ali