Citigroup was ordered by regulators to cease private banking operations in Japan because of "serious violations," including misleading customers and failing to prevent suspected money-laundering. Citibank Japan's licenses will be revoked in four cities, affecting about 10,000 customers, the Financial Times reported. The order does not affect Citigroup's investment banking business in Japan. But it is the latest in a series of blows to the reputation of the world's largest financial-services company, which has admitted - or apologized to international regulators for - missteps three times in the past week.
A merger that would overtake Citigroup as the world's biggest bank moved closer to completion Friday when Japan's Mitsubishi Tokyo Financial Group extended $6.4 billion in emergency funding to its takeover target, UFJ Holdings Inc. The investment assures Mitsubishi Tokyo of one-third of UFJ's voting rights, effectively giving it a veto over any other attempt at a takeover. Still, rival Sumitomo Mitsui Financial Group, which also has offered emergency funding as well as a 23 percent premium over UFJ's share price, said it would not give up its merger hopes and might take its case directly to the latter's stockholders.
Cooper Tire & Rubber Co. agreed to sell its auto parts business for $1.165 billion to private equity firms Cypress Group and Goldman Sachs Capital Partners. The division, Cooper-Standard Automotive of Novi, Mich., makes tubing for brakes and transmissions, rubber sealing for windows and doors, and other parts. Although the unit has accounted for about 45 percent of sales, Cooper wants to focus on selling tires in China and other fast-growing markets, Bloomberg.com reported Friday. Cooper's headquarters are in Findlay, Ohio; both buyers are based in New York.
The final piece fell into place for Alitalia to receive a bailout from the Italian government after the union representing its flight attendants agreed to 900 job cuts, a pay freeze, and a longer work week. The union was the last of nine with which the airline was negotiating for givebacks that would qualify it for $488 million in government help. In all, Alitalia won agreements to lay off 3,689 employees. But it began the negotiations with a goal of eliminating 5,000 jobs, and analysts warned that additional cost- cutting would be necessary in the near future.
Jaguar, the luxury carmaker, announced 1,150 layoffs and the phaseout of production at its Coventry, England, headquarters. The company, a subsidiary of Ford Motor Co., cited a drop in sales in its vital US market.