Citigroup’s India-born chief Vikram Pandit,who has made a sudden exit,was forced to leave the banking behemoth following differences with the board over strategy and overall business performance,media reports said.
Pandit,who steered the crisis-hit Citigroup into profitability,resigned abruptly on Tuesday a development that took the Wall Street by surprise.
According to media reports,Pandit’s exit came in the wake of differences with the board.
“Pandit’s resignation came after a series of missteps this year left some directors feeling that the company wasn’t being managed effectively and that the board wasn’t kept adequately informed,” the Wall Street Journal said quoting sources.
In a similar tone,the Financial Times said that Pandit left Citigroup after a clash with the board over a series of recent missteps by the bank.
Citing sources,FT said the underlying issues behind Pandit’s exit include “Citi’s failure to pass Federal Reserve stress tests earlier this year,a defeat on a ‘say-on-pay’ vote by shareholders and the handling of the sale of the bank’s stake in Smith Barney,the retail brokerage,to Morgan Stanley.”
In an abrupt exit,Pandit resigned after nearly a five-year tenure during which he steered the third-biggest US bank through difficult years after the 2008 financial crisis.
“The action raises questions about whether the sprawling Citigroup empire ultimately will be dramatically pared back or broken up,something Pandit opposed,” the WSJ said.
WSJ further said that “his (Pandit’s) ouster was the culmination of months of growing board disenchantment with Pandit and his closest deputy,John Havens,president and chief operating officer,who earlier this year stormed out of a Citigroup board meeting”. Havens also resigned Tuesday.
Citing sources,WSJ said Michael E O’Neill,Chairman since April,told Pandit that he should resign or face being fired and Pandit quickly decided to resign.
O’Neill and two directors,Judith Rodin and Anthony M Santomero,then fanned out to individually meet with top executives,telling them it was a mutual decision of the board and Pandit to part ways,WSJ said.
Nagpur-born Columbia University graduate Pandit (55),who had been the CEO of Citigroup since December 2007,also stepped down as a member of its Board in a shock decision that came just one day after the quarterly results that beat market expectations despite a 88 per cent drop in net profit.
The Board of Directors has unanimously elected Michael Corbat CEO and a director of the Board,the company said in an unexpected announcement that stunned Wall Street. The change is effective immediately.