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February - March 2008

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Business News

Vikram Pandit, New CEO at the Citigroup Inc.

Citigroup Inc. on Dec 11 named insider Vikram Pandit, 50, as its new chief executive officer. The appointment makes Pandit the highest-ranking Indian American on Wall Street.

Win Bichoff, acting CEO since the Nov. 4 ouster of CEO Charles O. “Chuck” Prince III, 57, will assume the duties as chairman. Prince was forced out chiefly because of spiraling $11 billion in losses from Citi’s credit-related businesses and the growing subprime mortgage crisis.

India-born Pandit, a former Morgan Stanley executive, was appointed in mid-October to oversee Citigroup’s newly created investment-banking and alternative-investments business unit. He joined the bank in July when the hedge fund he ran was bought out by the No. 1 U.S. bank.

Citigroup made the announcement at 2:15 p.m. on Dec 11, the same time the U.S. Federal Reserve had a scheduled announcement on interest rates.

Pandit is widely seen as a financial expert who can guide the bank out of its current troubles. But some investors expressed concern that Pandit has never run a public company, let alone one as big and complex as Citi. Pandit has no experience leading a consumer business, which at Citi generates more than half of overall revenue.

Born in Nagpur and with three degrees from Columbia University, Pandit’s unit at Morgan Stanley consistently performed well, but he was criticized by some insiders for being too conservative about taking trading and lending risks.

Pandit quit Morgan Stanley in April 2005 after former CEO Phil Purcell named Steve Crawford and Zoe Cruz as co-presidents over Pandit. After Citi bought Old Lane, the hedge fund he founded after quitting Morgan Stanley, Pandit was made head of a small unit for alternative investments, but from the start he was considered a likely successor to Prince.

As CEO, Pandit must now steer the bank back from its first quarterly loss in 16 years and convince analysts not to downgrade the company’s credit ratings. Citigroup has dropped about 40 percent this year, the worst performance in the Dow Jones Industrial Average, on speculation losses from subprime mortgage investments would force a dividend cut.

Hours after his appointment, the new chief suggested that his first act may be restructuring the behemoth organization to a more manageable level, after ousted CEO Charles Prince saw Citi run into massive losses on esoteric mortgage-backed securities.

“I will undertake an objective and dispassionate review of all the businesses individually and in aggregate,” Pandit said Dec 11 evening, during his first analyst call after being named CEO. “The goal is to drive profitability, which in turn drives shareholder returns.”

Pandit’s mandate will be threefold. It will include making Citi productive, positioning the financial institution for the future and focusing on its culture — a culture many have said has been lacking at the 300,000-strong organization.

Analysts say Citigroup’s balance sheet problems could spark a major asset sale at the bank. CreditSights takes that a step further, speculating that smaller rival JPMorgan Chase & Co could buy Citigroup and boost earnings substantially by cutting operating expenses, adding Citigroup may have to consider a dividend cut, a major asset sale or even a takeover.

As the new CEO of Citigroup, Pandit is among most high-ranking of an impressive cohort of Indians manning the battle stations at one of the world’s largest financial institutions. About 13 Indians service on the bank’s management committee. Among the other stars are: Ajay Banga, chairman and CEO of Global Consumer Group International; Deepak Sharma, CEO, Citi Global Wealth Management International; Vikram A. Atal, Chairman & CEO, Citi Cards, Global Consumer Group and Suneel Bakskhi, head of Citi Markets and Banking.

Vikram S. Pandit

AGE-— 50; Born; Nagpur, India.

EXPERIENCE — After working for two decades at Morgan Stanley, Pandit left the investment bank with a few colleagues to start the hedge fund Old Lane, which Citigroup bought in mid-2007 for $800 million. Pandit at first was in charge of Citi’s alternative investments. Then his role expanded to include the bank’s markets and banking unit, too.

EDUCATION — Pandit arrived at Columbia University at the age of 16, and earned a bachelor’s degree in electrical engineering in 1976. At Columbia, he also earned a master’s degree and a Ph.D. in finance.


Anuj Chande, Head of Grant Thornton’s South Asia Group, has recently been named amongst the UK’s 100 most powerful Asians in the “2007 Carter Andersen Asian Power 100”.

This is the second year running that Mr Chande has been included in the list, which is created from 17,000 nominations and seeks to recognise those ‘whose exceptional work makes an enormous and essential contribution to the wealth, health and intellectual well-being of Britain’.

Anuj Chande, head of Grant Thornton’s South Asia Group, says: “It is a delight and an honour to be named amongst the Asian Power 100. Somebody nominated me, but I’ve no idea who it was, but to be recognised by your peers in this way is such a privilege.”

Michael Cleary, Chief Executive of Grant Thornton, says: “This is a tremendous achievement for Anuj and is a result of his tireless work over the past 15 years to promote strong Asian-Anglo business relationships and assist those Asian businesses coming to the UK to either make acquisitions, set up greenfield sites or to list on the London Stock Exchange. It is also excellent recognition of the strong networks he has established in the UK Asian business community.”

Alongside Anuj, this year’s Asian Power 100 includes Metropolitan Police Assistant Commissioner Tarique Ghaffur, psychiatrist and broadcaster Raj Persaud and novelist and comedian Meera Syal.

The City of London joins UK India Business Council as an institutional member.

UK India Business Council, (“UKIBC”) the lead organisation supporting the promotion of bilateral trade, business and investment opportunities between the two countries, today announced that the City has increased its direct links into India’s growth financial services sector thanks to a partnership between the UKIBC and the City of London.

The City of London’s institutional membership is another step towards creating an extensive network of influential corporate and individual members. UKIBC will provide the resource, knowledge and infrastructure support vital for UK companies to make the most of emerging opportunities in India’s financial services sector and for Indian companies to invest in the UK.

Sharon Bamford, Chief Executive of UKIBC, commented:

“We believe UKIBC’s interests are closely aligned with the City of London’s objective to work closely with India to capitalise on our extensive knowledge and experience of building a global financial centre through genuine partnership and sharing of knowledge. With the opening of an office in Mumbai and partnership with UKIBC, the City of London rightly recognises the tremendous scope for both financial services and all other service sector institutions to develop business and investment interests in India. Leading companies from the UK are already active in India’s financial markets and we hope this new partnership with City of London will further promote the opportunities which exist.”

The City of London is at the heart of the world’s financial markets. It is a unique concentration of international expertise and capital, with a supportive legal and regulatory system, infrastructure and an unrivalled concentration of professional services.

Lord Mayor of the City of London, Alderman David Lewis said it was fitting that the City of London be the first institutional member of UKIBC.

“Financial services are one of the UK’s key strengths and we regard India as a priority market for our international work. The City’s links with UKIBC are strong, together we promote greater trade and investment between the two nations, and through high-level policy visits seek to increase market access and share financial services expertise,” Lord Mayor Lewis said.

Lord Bilimoria, Chairman of UKIBC, said:

“The UKIBC has worked increasingly closely with the City of London and the Lord Mayor and I am delighted that the City of London is the first of what I’m sure will be many institutional members joining the UKIBC.

I look forward to building our relationship in order to enable the City of London to strengthen its place as the world’s leading financial centre.”

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