A Bloomberg report that one of the most powerful bankers in Mexico has a perfect avenue to display his fine political connections - Oceanografia SA's allegedly fraudulent loans. Citigroup Inc Co-President Manuel Medina-Mora, who is in Mexican president Enrique Pena Nieto's social circle, has been urged by the country's senators last week to testify over the bank's $400 million of loans to the oil service provider. The news agency said Citigroup is also conducting its own investigation about the scandal, of which the bank is involved in through their local unit Banamex.
Medina-Mora held the chief executive post of Banamex from 1996, and rose to chairman of the bank in 2010. Bloomberg said Medina-Mora displayed his financial skills when he earned significant revenues for the global consumer-banking division that he has run since 2011. In 2013, the Mexican bank earned $7.1 billion, which the news agency said is over half of the net income of Citigroup. His meetings with top executives of Banamex and the bank's clients were considered fruitful as well, as the bank's profits had swelled from 18.5 billion pesos ($1.4 billion) last year compared to 4.1 billion pesos in 2004.
At the moment, the US Federal Bureau of Investigation is currently probing Banamex and its management, as its loans to Oceanografia are tied to services the latter said have provided to state-owned oil monopoly Petroleos Mexicanos, or Pemex. Last month, Citigroup has said that majority of the $585 million it loaned to Oceanografia were fraudulent.
Bloomberg said that the push of Mexico's Senate to have Medina-Mora testify is allegedly being blocked by President Zedillo and Pena Nieto's Institutional Revolutionary Party, as Senator Enrique Burgos somewhat confirmed when he expressed that the country's Congress to not get involved with the Oceanografia investigation.
When talking about how Medina-Mora runs his ship, former Citigroup managing director Richard Couch told the news agency, "He built a group of very loyal lieutenants who understood what was important for Banamex. Culturally there was just a tendency to be deferential to whoever was in charge in the room at the time."
