Citi Bank Sri Lanka CEO Dennis Hussey, in the centre of the oil hedging furore with Standard Chartered CEO Clive Haswell, has been transferred to Japan, the Sunday Times learns.
Citi Bank officials were not available for comment on reports that Mr Hussey’s
transfer was connected with the controversial hedging deals where the bank has filed for arbitration in an international tribunal.
Citi Bank along with other foreign banks, was not in favour of a compromise formula proposed by a Ministerial Committee which was appointed to resolve the issue involving hundreds of millions of dollars.
Mr Hussey who came to Colombo about 18 months ago has now reportedly been moved to Japan in a non-CEO position. CEOs of foreign banks, are known to serve a minimum of three years in an overseas posting.
Banking sources said Mr Hussey’s successor, would be expected to revive the image of the bank after the hedging fiasco with the Ceylon Petroleum Corporation.
Deutsche Bank is the third foreign bank, which along with the Commercial Bank and People’s Bank, drew up hedging contracts with the CPC some two years ago.
These deals turned sour (for the CPC) when fuel prices began tumbling instead of going up as expected.
Oil prices which surged to US $140 a barrel at one stage fell to a $30 low late last year but has begun rising. But fuel prices are rising again and this week rose to US $70 a barrel.
Two weeks ago the Central Bank (CB) ordered the five banks not to make payment to overseas banks after it was discovered that these payments were being made without authorization.
“These are capital account transactions which must have the authorization of the Central Bank,” a CB official said, adding that if their investigations show that there has been a violation of the Exchange Control Act, those payments would have to be recalled. |
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