Mexico senators ask court ruling on Citi ownership - News

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Mexico senators ask court ruling on Citi ownership

By: AFX | 04 Nov 2009 | 08:38 PM ET

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MEXICO CITY, Nov 4 (Reuters) - Mexican senators asked the Supreme Court on Wednesday to rule on whether Citigroup's local bank is breaking the law by being partly owned by the U.S. government, a Senate spokesman said. The U.S. government's 34 percent stake in Citigroup, acquired during the global credit crisis, raised legal questions about Banamex, Citi's Mexico unit.

Under Mexican law, foreign governments are generally not allowed to own banks in Mexico. The senators' sent their request for the top court on Wednesday evening, the Senate spokesman told Reuters, asking not to be named. The initiative does not refer to Citigroup specifically, but the U.S.

government's ownership of Banamex, Mexico's No. 2 bank, has been contentious among some lawmakers, who insist it is breaking the law. They say Citigroup should be forced to sell Banamex, which it bought in 2001 for $12.5 billion -- at the time the biggest ever acquisition in Mexico. In March, Mexico's finance ministry decided Banamex was not breaking the law, saying the rule did not apply because of the emergency caused by the global crisis. (Reporting by Miguel Angel Gutierrez; Editing by Steve Orlofsky) Keywords: MEXICO BANAMEX/ (mica.rosenberg@thomsonreuters.com; +52 55 5282 7153; Reuters Messaging: mica.rosenberg.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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