Mexico Widens Probe Into Banamex Banking Loss Amy Guthrie and Christina Rexrode - WSJ.com
go to original June 3, 2014

A Banamex advertisement is seen in Mexico City. (Reuters/Edgard Garrido)

Mexican authorities are widening their investigation into an alleged accounting fraud involving Citigroup's local unit and an oil-services company, with the Mexican attorney general issuing arrest warrants for former bank employees and a judge setting $6.2 million bail for the former head of the oil-services company.

The oil-services company, Oceanografía SA, has been under government control since Citigroup disclosed the alleged fraud on Feb. 28. The company's chief executive, Amado Yáñez Osuna, was charged with bank fraud last week. Mr. Yáñez hasn't made any comments on the matter and his lawyer couldn't be identified.

It is unclear to whom the warrants are directed or how many people might be arrested. But an official with Mexican Attorney General Jesús Murillo Karam confirmed Monday that former Banamex employees were among those being sought by Mexican authorities. The attorney general's moves were first reported in the New York Times.

The latest developments highlight the tough slog that Citigroup faces as it tries to unravel what went wrong at its Mexico unit, known as Banamex. Citigroup Chief Executive Michael Corbat has vowed to fix internal problems and called the ordeal a "despicable crime."

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