Who knew Embattled Citigroup Bank's biggest shareholder is Saudi Prince Alwaleed bin Talal

[KoKo]

November 3, 2007
Citigroup Chief Is Set to Exit Amid Billions in Losses
By ERIC DASH and LANDON THOMAS Jr.

The embattled head of Citigroup, the global banking giant, has told directors that he would resign from the bank after an emergency meeting this weekend in the wake of a $5.9 billion write-down and sharp drop in profit, people briefed on the situation said last night.

Charles O. Prince III, 57, the chairman and chief executive, took responsibility for the bank’s disappointing results and said it would be better for the bank if he left, these people said.

At the meeting on Sunday, directors are expected to formally accept his resignation and discuss the possibility of another write-off, just weeks after announcing large losses related to subprime mortgages and the credit market turmoil. Mr. Prince did not return calls yesterday for comment.

A search committee will begin looking for Mr. Prince’s successor immediately, according to a person briefed on the situation. “The entire organization is in uproar, and people have been looking for leadership,” said one Citigroup executive close to the situation. “The organization is waiting for something.”

“At some point, the company is worse off or better off without the guy,” this person said. “That collective point has come and passed.”

Mr. Prince’s exit will end a tumultuous four-year reign at the bank, where he won over the board with an aggressive growth strategy but failed to convince Wall Street investors and many of his own employees. It will also set off a new round of calls to dismantle Citigroup’s sprawling empire.

News of Mr. Prince’s plans to resign were first reported on The Wall Street Journal online.

-snip-

Mr. Prince would become the second chief executive to lose his job in the wake of the subprime mortgage problems. Earlier this week, the chairman and chief executive of Merrill Lynch, E. Stanley O’Neal, was forced to retire after the brokerage firm reported an $8.4 billion write-down, the largest in its history, and an unauthorized overture to merge with rival Wachovia, that angered board members.

Though Mr. Prince had been under pressure for months, he had a similarly swift downfall. In early October Citigroup announced a $5.9 billion write-down that led to a 57 percent drop in third quarter profit. The poor performance and the size of the losses renewed speculation that Mr. Prince would run into trouble.

But Citigroup’s biggest shareholder, the Saudi Prince Alwaleed bin Talal, and two of its most influential directors quickly offered their support. “Now is not the time to be saying, ‘Do we change course, or do we change captains?’ ” said Richard D. Parsons, Time Warner’s chairman and chief executive who heads the Citigroup’s personnel and compensation committees.

Robert E. Rubin, the former Treasury secretary and chairman of the bank’s executive committee, suggested that Mr. Prince would “be the C.E.O. at the annual meeting five years from now, and as long past that as he wants to be.”

http://www.nytimes.com/2007/11/03/business/03bank.html?pagewanted=print