April 2, 2015 / 2:31 AM / 5 years ago

Argentina cenbank strips authority from local Citibank chief

BUENOS AIRES, April 1 (Reuters) - Argentina’s central bank said on Wednesday that it will no longer recognize the head of the local Citigroup affiliate, the latest salvo in a years-old international legal battle over defaulted sovereign debt.

The action was taken five days after the Argentine securities regulator said Citibank Argentina had violated local laws in striking a deal with litigating U.S. hedge funds and suspended the bank from conducting capital market operations.

Under the accord, Citibank agreed not to appeal a U.S. court ruling that interest payments on restructured bonds, subject to Argentine law, could not be processed if the bank was allowed to make two one-off payments to help it exit its local custody business.

The central bank issued a statement saying that Gabriel Ribisich could no longer represent Citibank Argentina because he “ignored Argentina’s legal framework regarding sovereign debt restructuring.”

A spokesperson for Citibank Argentina’s parent group, Citigroup, could not be immediately reached for comment.

Citibank Argentina sees itself as an innocent party caught up in a bitter court battle between the Argentine government and the New York-based funds after they were awarded full payment on their defaulted debt by a U.S. judge.

The judge barred Argentina from servicing its performing debt until it settled with the creditors, but Argentina insisted Citibank keep processing payments.

Reporting by Walter Bianchi; Editing by Simon Cameron-Moore

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