Argentina warns Citibank it could lose banking license

Updated 14 March 2015
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Argentina warns Citibank it could lose banking license

BUENOS AIRES: Argentina threatened Friday to revoke Citibank's operation license if it refuses to process payments to bondholders, a move ordered by a New York judge presiding over a long fight between the country and a US investment group.
In a statement, the Ministry of Economy said failure to process the payments could lead to criminal charges against Citibank's employees in Argentina. The warning came a day after US District Judge Thomas Griesa told Citibank that it cannot let its Argentine branch process payments to bondholders unless US investors are paid as well.
In a statement sent to The Associated Press late Friday, Citibank said it planned to appeal the decision and would "pursue all legal measures available to comply both with this decision and Argentine legislation."
The dispute stems from Argentina's default in 2001 on $100 billion of debt. Most bondholders agreed to debt-swap deals in 2005 and 2010 that lowered Argentina's payments. A group of US hedge funds, however, demanded full payment on Argentina's debt and Griesa ruled they must be paid roughly $1.5 billion if Argentina pays interest to other bondholders.
In arguments made last week, Argentina said payments processed through Citibank's local branches should not be subject to Griesa's rulings. The judge, however, disagreed, saying there was overwhelming evidence the bonds had been marketed outside Argentina despite being processed locally.
"Judge Griesa's order violates, again, basic legal principles and makes clear that his decisions are not grounded in the law, but in his obvious bias against Argentina," the ministry statement said.
The judge urged Argentina to return to the bargaining table to negotiate a solution to the dispute. President Cristina Fernandez, known for fiery, populist rhetoric, often derisively calls the holdout debtors "vultures" and has said her government won't be extorted by US courts.
"Citibank is in a very tight spot," said Anna Gelpern, a law professor at Georgetown University who is a debt expert. "The judge basically said, 'Your regulatory troubles overseas are not my problem.'"
Citibank forms an important part of Argentina's financial landscape, being used by many multinational companies. According to Citibank's website, the bank opened in Argentine in 1914 and currently operates 74 branches in the country.
Gelpern said the latest ruling could have wide ramifications for domestic debt generation, in Argentina and other countries unable to access international financing. For years, Argentina has been unable to access credit overseas so its only way to finance projects has been through domestic debt issuances.
Griesa's ruling "is really expansive," said Gelpern. "Debt that people thought was domestic isn't domestic anymore."


Qatar Airways confirms ‘substantial’ annual loss, blames row with regional neighbors

Updated 25 April 2018
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Qatar Airways confirms ‘substantial’ annual loss, blames row with regional neighbors

ANTALYA, Turkey: Qatar Airways made a “substantial” loss in its last financial year because of a regional dispute that has banned the airline from four Arab countries, its chief executive said on Wednesday without revealing the extent of the losses.
Qatar Airways has been blocked from flying to 18 cities in Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since June when those countries cut ties with Qatar, accusing it of supporting terrorism. Doha denies the charges.
“We have increased our operating costs. We had to also take a hit on revenues so we don’t think that our results for the last financial year will be very good,” Chief Executive Akbar Al-Baker told reporters at the Eurasia Airshow in Antalya, Turkey.
“I don’t want to say the size of the loss but it was substantial.”
Other parts of the business were profitable though that was not enough to make up for the airline loss, Baker said.
Qatar Airways has several subsidiaries including airport ground handling services and catering units.
The airline had warned of the loss for several months.
The state-owned airline will need another eight weeks to finalize its books and make adjustments before it announces its financial results for the year to March 31, Baker said.
Qatar Airways made 1.97 billion Qatari riyals ($541 million) profit in its previous fiscal year.
Neighboring Saudi Arabia and the UAE were popular routes for Qatar Airways, which has also been banned from the airspace of the four boycotting states.