Citigroup to cooperate in debt probe

Citigroup to cooperate in debt probe

	Published : Thu, 31 May 2007 23:43 By : Agencies Print this Story

QUITO, Ecuador (AP) - Citigroup will provide Ecuador's top prosecutor with the names of bond holders as part of an investigation into market manipulation allegations against the Andean country's economy minister.

Attorney General Jorge German said in a statement Thursday that Citigroup has offered to provide the names of holders of Ecuadorean bonds by Monday.

German launched the investigation into whether there were any irregularities in Economy Minister Ricardo Patino's announcement in February that Ecuador would miss the Feb. 15 deadline for a $135 million payment on its Global Bonds 2030.

Patino said Ecuador lacked the money to make the payment before the deadline, but two days later, the government said it would make the payment on time, raising suspicions that Ecuador was trying to spark sharp fluctuations in bond prices.

The investigation began after a videotape was aired on Teleamazonas TV showing Patino meeting with investors and a former Ecuadorean economy minister discussing a plan to 'shock' the market by driving down the bond prices and allowing them to shoot up after the announcement of an on-time payment.

Last week, Patino, who denies the allegations, said he recorded the meeting himself to expose 'corruption' in the debt sector.

A group of lawmakers have also launched a probe into the minister's actions. Congressmen can censure Patino, but cannot fire him.

The video has also raised suspicions that the alleged scheme was set up to benefit Venezuelan banks. Patino said on Thursday that he has requested information about the country's holdings of Ecuadorean debt from his Venezuelan counterpart, Rodrigo Cabezas.

'I'm sorry to say it publicly: He has not given me the information,' Patino said.

Leftist President Rafael Correa, a U.S.-trained economist and close ally of Venezuelan President Hugo Chavez, defended Patino, calling him an 'honest man.' Patino said Correa ruled out his possible resignation as ministry head.

Correa has vowed to renegotiate the country's $16.4 billion foreign debt and Wall Street had been watching to see how Ecuador handled the Global Bonds 2030 payment.