had a role to play in what has been described as one of
's biggest blunders.
The case involves one where Citibank acted as an administrative agent for a term loan taken by Revlon, and where it was to wire approximately $7.8 million in interest payments to Revlon’s lenders. Instead, Citibank wired almost $900 million. It mistakenly sent the principal amount too.
"The resulting payments equaled — to the penny — the amounts of principal and interest that Revlon owed on the loan to its lenders. The question in this case is whether Citibank is entitled to get the money back or whether the lenders are allowed to keep it,” the US court filing showed.
The transaction was subject to Citibank’s “six-eye” approval procedure, which requires three people to review and approve a transaction before it is executed.
In this case, the first two sets of eyes were those of
employees. This was part of work that had been outsourced to Wipro.
The first employee, called the maker, had manually put the payment information into the bank’s Flexcube loan processing program. The second employee, called the checker, checked what the first employee did.
The final approval came from a Citibank team, and that team is seen to be ultimately responsible for the transaction.
The matter went to court and the court has ruled that the lenders who received the money from Citibank are entitled to keep it. Citi plans to challenge the ruling.
The transaction dates back to 2016 when Revlon took a $1.8 billion, seven-year syndicated loan and Citibank served as the administrative agent for the loan.
It said several members of the ABTF team, including some of those involved in processing the August 11th wire transfers, are employees of Wipro who worked exclusively on Citibank matters and maintained Citibank email addresses.
The transaction, it said, was also subject to Citibank’s “six-eye” approval procedure, which requires three people to review and approve a transaction before it is executed.
After receiving email, a Wipro team manager and member of Citibank’s ABTF team, another Wipro employee, began processing the transaction according to the instructions the ABTF team had received.
“Alternatively, and independently, the Court can exercise jurisdiction pursuant to the Edge Act because the August 11th wire transfers were executed on Citibank’s behalf by Wipro employees stationed in India,” it said. The act allows an American bank to engage in international banking and finance operations.
as one of its large customers.
When TOI contacted for a response, a Citi spokesperson said, "We strongly disagree with this decision and intend to appeal. We believe we are entitled to the funds and will continue to pursue a complete recovery of them.” An email to Wipro didn't elicit a response.