Thursday, November 1, 2012

Citigroup Inc. (NYSE:C) Chairman Believed To Have Plotted Pandit’s Exit

Last day of Vikram Pandit at Citigroup Inc.(NYSE:C) swung from celebratory to devastating in span of minutes. Having received congratulatory e-mails about the earnings report in the morning that indicated the bank was on a more solid ground, Mr. Pandit walked into the chairman’s office on 15th October for what he considered just another meeting on his calendar.

Sadly, it was not so. Mr. Pandit was told that three news releases were ready. One said that Mr. Pandit had resigned from his post, effective immediately. Another stated that he would submit his resignation, which would be effective at the end of this year. The third release said that he has been fired without a cause. Mr. Pandit had to make a choice.

The abrupt encounter, as described by the three people briefed on the conversation, had included a terse comment by Michael E. O’Neil that said that the board has lost confidence on Pandit.

A shocked Mr. Pandit chose to resign instantly. Although Mr. Pandit and the board have publicly exemplified his exit as his decision, interviews with people, who are close to the board, describe how the chairman tricked behind the scenes for months to compel Mr. Pandit to leave and replace him with Michael L. Corbat, the chosen successor.

After becoming the chairman, Mr. O’Neil scrupulously built a case for the chief executive’s dismissal, they say, first meeting secretly with less-content board members and then involving others until Pandit had virtually no friends left.

Since Mr. Pandit was reeling from his encounter, 3 board members confronted John Havens, a longtime lieutenant and Chief Operating Officer of the bank.

It is not clear as to when exactly the board had decided on a successor. Discussions among board members had accelerated while Mr. Pandit was in Japan at the yearly meeting of the IMF and the World Bank.

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