Mexican oil company Evya accused of defrauding Citigroup

4/16/2014

Mexican oil company Evya accused of defrauding Citigroup

ADAM WILLIAMS and DAKIN CAMPBELL

CIUDAD DEL CARMEN, Mexico (Bloomberg) -- Evya, an oil-services provider to Pemex, is the second Mexican company implicated for having fraudulent loans linked to Citigroup, according to a spokesperson at state-owned Pemex.

Citigroup found a second case of fraud at its Mexico unit, this one for less than $30 mn, CFO John Gerspach said on a conference call after the bank reported first quarter earnings. Ciudad del Carmen based Evya is the company implicated by Gerspach, according to the spokesperson at Pemex, who asked not to be named because of company policy.

In February, New York based Citigroup cut its previously reported 2013 earnings for the fourth quarter after finding fraud related to about $585 mn in loans made to Mexico based oil services company Oceanografia. Citigroup found issues beyond Oceanografia, John McDonald, an analyst at Sanford C. Bernstein & Co., said in a report previous month.

“The issues we found to date involve that one program and these two suppliers,” Gerspach said. “There are obviously issues with how that program was being executed.”

Requests seeking comment from Evya, which designs oil platform heliports, weren’t immediately returned. Oceanografia, which was seized by the government in February, is now being run by the Finance Ministry’s Asset Transfer and Administration Service, known as SAE, and was approved for bankruptcy protection on April 15, 2014, by a Mexico City judge.

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