According to a report in the South China Morning Post, Citigroup’s internal control system has been called into question after adviser Ramesh Sadhwani was able to sell a product to investors for four years which he claimed would provide up to 18% annual returns, before he was sacked in February 2009.
The report said that seven investors were affected by the false representation, with total losses estimated to be US$1.7m.
Although the investors complained to both the Hong Kong and US offices of Citi, the Monetary Authority of Hong Kong and the SFC, according to the report, Sadhwani was able to leave the city shortly after being fired.
The South China Morning post added that, according to a person familiar with the situation, the case is thought to be complex and involves more than just Sadhwani.
