S&P replaces president with Citibank exec after U.S. downgrade

SYDNEY/BANGALORE Tue Aug 23, 2011 7:59am EDT

1 of 2. Citibank Japan CEO Douglas Peterson attends a joint news conference in Tokyo, April 27, 2007.

Credit: Reuters/Kiyoshi Ota

SYDNEY/BANGALORE (Reuters) - The chief of Standard & Poor's will step down next month, to be replaced by a senior Citibank executive, in a move announced a few weeks after the credit rating agency downgraded U.S. government debt and sparked a row with Washington.

S&P's parent, McGraw-Hill Companies Inc, said on Tuesday that Deven Sharma, who has served as S&P president since 2007, would step down on September 12, to be succeeded by Citibank chief operating officer Douglas Peterson.

"S&P will continue to produce ratings that are comparable, forward looking and transparent," McGraw-Hill said in a statement, adding that Sharma would work on a strategic portfolio review for the group until leaving at year-end.

The U.S. downgrade on August 5 helped lead to the biggest sell-off in share markets since the global financial crisis three years earlier and sparked a row with the U.S. Treasury over some of the agency's calculations in arriving at the new rating.

The U.S. Justice Department is also investigating the ratings agency over its actions on mortgages leading up to the 2008-2009 crisis, a source familiar with the matter told Reuters last week.

But the Financial Times, which first reported the news of Sharma's resignation, quoted unnamed sources on Tuesday as saying his departure was unrelated to the downgrade or the Justice Department investigation.

The board of McGraw-Hill Companies made the decision to replace Sharma at a meeting where it also discussed its ongoing strategic review on Monday, the Financial Times said.

McGraw-Hill directors and executives met on Monday with Jana Partners LLC, a hedge fund, and the Ontario Teacher's Pension Fund to hear their arguments that the company should be broken up.

(Reporting by Abhishek Takle in BANGALORE and Wayne Cole and Mark Bendeich in SYDNEY; Editing by Ed Davies)

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Comments (23)
tiger7274 wrote:
S&P et al should be thoroughly investigated for their role in rating MBS & CDOs which led to destruction of trillions of dollars.

S&P’s further role in downgrading the United States should also be fully investigated.
Why were they so keen to downgrade that Friday given the controversy over data?
Why so keen to stir further havoc & precipitate any stock plunge?
Extremely thorough investigations should be carried out to rule out inappropriate trading & profiteering.

Talk about to big too fail financial institutions, why should unelected institutions like S&P wield such power over everyone.
Are they so highly intelligent and always right?
Can countries only succeed if they follow the S&P way?
If so, there should be an S&P rep in every government in every country in the world to dictate what should be done.

Aug 22, 2011 11:00pm EDT  --  Report as abuse
Fancy433 wrote:
So this is supposed to be better? Citi and all of it’s companies went belly up and had to be bailed out by the Obama Bunch and are still in financial trouble. Now Obama has one of his men on the inside. Another replacement with ties to the Obama Bunch. Well, if the DOJ didn’t have enough reasons to investigate S&P I wonder if they do now? Keep the investigation going or just stop the pursuit? I would think just dropping the investigation altogether now.

Can you imagine that, right in time for that all important re-election kick-off with the upcoming jobs program. What’s next for Obama to put in place for his re-election bid? Oh I forgot he has a OBL movie due out right at election time. That’s right folks Obama the man behind to plan to get OBL. The only president in the world with such power in wisdom.

This stuff nakes me sick to even think about.

Aug 22, 2011 12:57am EDT  --  Report as abuse
Alfred.Brock wrote:
Deven Sharma hails from India. The CEO of Citibank, Vikram Pandit, also comes from India. Citibank has long booked the bulk of its profits from a small trading arm whose issues were approved by S&P almost like clockwork. They have not faired well and Citibank continues to struggle even though it was given billions of dollars of American taxpayer money. Citibank’s actual position, it seems, is similar to that of Fannie Mae and Freddie Mac. As for Devan Sharma and the Indian connection – McGraw-Hill seems to me to be at root a predatory and parasitic corporation. Standard and Poor’s was a sideline at best – the real money for McGraw-Hill comes from overcharging for schoolbooks in the United States, Canada and around the world. Where are the Americans in American business?

Aug 23, 2011 7:08am EDT  --  Report as abuse
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