Asset Manager Axis Sues Citi’s Banamex Over Unpaid Trust Fees

(Bloomberg) -EKSEN Asset Management filed a lawsuit for a prize more than $ 53 million for not paying a safety-supporting confidence that supports a bankrupt oil service company of Mexico Bank.

Axis filed a petition at the New York Federal Court on Wednesday, claiming that the award given by the ICC International Arbitration Court in December did not pay.

A Citigroup representative said in a statement that the company has legal reasons to appeal the arbitration award and filed a lawsuit in the Mexican Federal Court. “We will continue to defend the issue strongly,” he said.

The dispute stems from a confidence created by EKSEN in 2012, a financial instrument that enables corporate investors to finance Mexican companies and infrastructure. It was founded as an axis manager and Banamex became the Board of Trustees in 2013 to collect money from Mexican retirement funds controlled by Banamex and Sura Portfolio SA in 2013. These funds helped financing the Mexican oil rig operator Oro Negro, founded by Axis and other partners.

In 2017, Oro Negro applied to the bankruptcy protection in Mexico after entering problems among oil price decreases. According to the petition, Banamex stopped paying the management fees that owed to the axis for her role as a trust manager.

The axis made several requests to pay these fees before the arbitration in 2023. According to the petition, the Arbitration Court concluded that the axis was entitled to interest from August 2017 to December 2022 with interest – interest and expenses. The petition showed that fees were at least 53 million dollars, and that some unified interest accusations have increased the installments even more.

Banamex – under the management of Citigroup – refuses to pay the award.

“After committing to the public to comply with the award, Banamex and lock confidence holders seem to have given up these commitments,” Axis said for Axis.

The cases are preparing to list Citigroup’s Mexican retail bank as a painful section from Banamex’s past. The New York -based bank initially tried to sell the unit, but at that time President Andres Manuel Lopez Obrador could not reach an agreement with the Mexican mining boss German Larrea in 2023 due to the intervention for sale.

Last month, Bloomberg News sets up to buy a piece of Banamex that can be built in a share that controls the rich Mexicans of the bank. These include former banker Fernando Chico Pardo, who wanted to buy 20% of the unit before the first public offering.

Jane Fraser, Chairman of the Citigroup Executive Officer, reiterated that the public offering could extend to 2026 in July, while browsing the bank regulatory approval and market conditions. Wells Fargo & Co. Analyst Mike Mayo said this month that the public offering could be postponed until the second half of next year. This said Citigroup would give more time to sell full bank, which would be a more positive result for Citigroup shareholders.

The country is also a very important time for Mexico since it has changed half of the Supreme Court and the Federal Judges. When Mexico took steps to overhaul the court system last year, critics warned the movement that the movement will control the MORENA party of the government on the last independent branch of the government.

As a way to avoid the new judicial system of the country, companies tended to rely on stronger arbitration in order to cope with issues. The Supreme Court has been stacked with justice, such as a strong new judicial disciplinary court.

According to non -public court documents by Bloomberg News, Axis filed a lawsuit against Banamex, who filed a separate lawsuit in Mexico, who wanted to cancel the Arbitration award. Banamex is represented by Javier Quijano Baz Law Office, who served in the government’s committee, which evaluates the judicial candidates.

Cortina y de la Torre Abogados, the law firm Quijano representative, did not respond immediately to the request for comment.

Gonzalo Gil White, son of former Finance Minister Francisco Gil Diaz, CEO of Axis. Gonzalo Gil White worked at Banamex at the financial desk structured at the beginning of his career before he founded Oro Negro with Gil Diaz’s nephew.

Oro Negro lost a separate arbitration last year. Through the government’s oil company Pemex, Mexico searched for more than 270 million dollars, claiming that Mexico, as well as other things, ultimately negotiated oil-Rig rental agreements that contribute to bankruptcy protection file.

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