Argentina’s central bank removed Citibank Argentina SA’s Chief Executive Officer Gabriel Ribisich from his post, increasing pressure on the lender for complying with U.S. courts in the country’s case with holdout creditors.
Banco Central de la Republica Argentina is barring Ribisich from leading the bank and serving as its legal representative in the country after he “ignored” local laws governing the restructuring of sovereign debt, while executing agreements signed abroad, the monetary authority said in an e-mailed statement. A Citibank spokesman didn’t immediately reply to an e-mailed request for comment.
Argentine authorities threatened last month to revoke Citibank’s license if it complies with U.S. District Court Judge Thomas Griesa’s March 12 ruling that payments on Argentina’s exchange bonds sold under local legislation must be blocked unless the country also pays its defaulted debt. The decision expands Griesa’s 2012 order that Argentina must pay holdout creditors, led by Paul Singer’s NML Capital, in full when it services debt issued in restructurings that followed the country’s 2001 default.
Griesa allowed the bank to make bond payments on Tuesday and on June 30 while it tries to exit its custodian business to avoid penalties. The judge prohibited all other institutions from making payments so that investors don’t receive the funds.
Regulators responded by banning Citibank from operating in the local securities market and appointed Caja de Valores SA to oversee bond payments. Confusion created by the decision prompted Clearstream Banking SA to temporarily halt settlements on all Argentine bonds on March 31.
Ribisich has been head of Citibank Argentina since April 2013, according to the lender’s website. Prior to Citibank, he had worked at Santander Rio since 1990.