SINGAPORE: Global banking giant Citibank has refuted allegations by business tycoon Oei Hong Leong that it caused him to suffer huge losses in his foreign exchange dealings.
Mr Oei is claiming unspecified losses and damages, believed to be in the hundreds of millions of dollars.
The businessman has accused Citi of making a mistake in the treatment of his margin accounts. He claimed that on September 15 last year, he was told he had a margin surplus of around US$100 million, but this doubled the next day to US$200 million.
He alleged that the additional margin led him to undertake currency option transactions, which he otherwise would not have done.
Citi's defence against Mr Oei's claims were filed on Thursday night and are based on three key points.
First, they said that at no time was Mr Oei misled on the amount of assets used in the computing of his collateral and in setting his trading margins.
Second, the bank points out that Mr Oei was and is a highly sophisticated and experienced trader, and had confirmed that he understood and was willing to take considerable risks to increase potential returns.
Citi also said the tycoon's trading in currency options was influenced by his own views of the markets and not just based on his margin surplus during that period.
The bank also refuted Mr Oei's claim that it had caused him to suffer losses when it failed to execute an earlier order for 30-year US treasury bonds worth US$600 million.
It said the order could not be filed as he had set his limit process below the indicative market prices.
The bank said it has acted professionally in managing Mr Oei's account and maintains that it has comprehensive and robust systems in place to handle clients' orders and transactions.
A pre-trial conference between the two parties is said to be set for mid-July.
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