Citibank made a mistake by accidentally sending or transferring US $ 900 million to the Revlon lender (creditor). This is the biggest mistake in banking history.
Quoting CNN.com, Tuesday (17/2), Citibank acts as a loan agent for Revlon. The big US bank intends to only send interest payments of around US $ 8 million to Revlon’s creditors.
However, Citibank actually sent funds nearly 100 times. What it should have been including US $ 175 million to hedge funds. Thus, the total funds that were accidentally sent to the creditors of Revlon reached US $ 900 million.
After the incident, Citibank filed a lawsuit so that funds that were accidentally sent to Revlon’s creditors could be returned. However, Citibank still has not received US $ 500 million from 10 investment advisory firms.
In the lawsuit, the court has ruled that the creditor was justified because he believed that the payments made by Citibank were deliberate. The reason is, Citibank itself did not realize their mistake until one day later.
“To believe that Citibank, one of the most sophisticated financial institutions in the world, has made an unprecedented mistake worth nearly US 1 billion would be utterly irrational,” read the court documents.
The Judge’s Decision
The judge’s decision used an internal chat between employees of HPS Investment Partners. One of Revlon’s creditors who received funds from Citibank. The chat was used as evidence that HPS Investment did not know there was a mistake until Citibank sent a notification.
Revlon creditors believe Citibank will send the prepayments for the loan. Moreover, the amount of funds that were accidentally sent was claimed to be the exact amount. It should have been paid by Citibank.
“We are very pleased with the judge’s wise, thorough and detailed decision, said Benjamin Finestone, the party representing the two creditors, namely Bridge and HPS Investment Partners.
However, Citibank will not remain silent. The company will appeal the court’s decision.
” disagree with this decision and intend to appeal. We believe we are entitled to these funds and will continue to seek full recovery, “the Citi Group said in an official statement.
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