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Citi Bankruptcy Rumours - The Truth
last updated: 22/01/2008

Rumours hit the Here Is The City news desk this morning that Citi was likely to file for
Chapter 11 bankruptcy imminently, after Middle-Eastern investors, specifically the Abu
Dhabi Investment Authority, had allegedly pulled its $7.5bn investment in the
company.

The implications of Citi filing for Chapter 11 are clearly huge, and the rumour mill is currently
working overtime. Further investigations have uncovered, however, that the rumours appear to
have originated out of the Far East Tuesday morning by what looks like a group of traders who
may be gone ambitiously short on Citi stock and are staring a big loss in the face. Circulating
malicious rumours about the company is this way is clearly designed to depress Citi stock further
and attempt to turn the trades around.

The truth is that, although far from out of the woods, Citi will not file for Chapter 11 and, indeed,
has had those Abu Dhabi funds in the bank for over a month. Furthermore, the firm's $2.9bn
public offering announced last week is already understood to be oversubscribed. The efforts to
beef up Citi's balance sheet, then, are well on track.

With the markets currently sensitive to every nuance, however, rumours of this kind can only
make a generally bad situation worse. Ian Brown, the CEO of Here Is The City, described this
kind of speculation as 'the financial equivalent of terrorism'. In the same way that we need to
remain constantly vigilant to threats of terrorist attack, responsible persons need to exercise
careful judgement before acting on unsupported rumours generated by third-parties with
dubious motives. The markets are in enough difficulty already without this kind of baloney. It's
business as usual at Citi. Let's go about our business too.