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Published August 31, 2010
| FOXBusiness
Citigroup (C) Tuesday caved into growing pressure and agreed to meet with a prominent securities analyst who because of his criticism of management has been blackballed by the big bank for nearly two years, FOX Business Network has learned.
The analyst, Mike Mayo, from securities firm CLSA, was contacted by Citigroup earlier today and was offered a meeting with key executives "by the end of September," Mayo told FOX Business.
It is unclear if Mayo will be meeting with Citigroup chief executive Officer Vikram Pandit or the firm's chief financial officer, now John Gerspach, for a meeting he has requested for the past two years.
A spokesman for Citigroup didn't have an immediate comment. Last week, a Citigroup spokesman told FOX Business that Mayo would meet with officials at the bank "in due course."
The move by Citigroup comes as the firm has faced intense criticism by large investors and even some rival analysts for blackballing Mayo from meetings with top executives at the bank, even as other analysts have gained access to key members of management, most notably its CEO and CFO. Yesterday, rival analyst Dick Bove -- who has taken issue with some of Mayo's critical research on the bank -- criticized Citigroup for not meeting with Mayo.
Mayo has angered Citigroup management by attacking the bank's business model, and most recently its accounting of so-called Deferred Tax Assets, which Mayo says inflates the firm's earnings. Mayo says Citigroup should be writing down, or taking losses on, its DTAs (a move the firm rejects) by as much as $10 billion. If Citigroup were to write-down its DTAs by that amount, it would both erode its capital base and cause massive losses.
But following several reports on FOX Business, what began as an esoteric argument over accounting became a story of corporate accountability. At issue: Whether a major company, particularly one that was bailed out and is partially owned by the federal government, can play favorites and provide access to key officials only to those analysts who tout its stock?
Citigroup received hundreds of billions of dollars in federal assistance during the dark days of the financial crisis in 2008, including a massive infusion of capital from the federal government, which became the bank's biggest single shareholder. The federal government is in the process of unwinding its stake in Citigroup.
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