A group of Mexican senators asked Mexico’s Supreme Court on Wednesday to make a ruling as to whether or not Citibank’s Mexican arm is breaking the law because it’s partially owned by the U.S. government, a Senate spokesperson said.
Currently, the U.S. government has a 34-percent stake in Citigroup (NYSE: C), which it had acquired as part of the various bailouts that Citibank received in the last year during the financial crisis. Now that Citibank is partially a state-run institution, many have begun to raise questions about Citi’s Mexico unit, Banamex. Under Mexican law, foreign governments are typically not allowed to own banks in Mexico.
The group of senators that sent the request for the top court to make a ruling on Wednesday evening asked not to be named. The request to the Supreme Court didn’t name Citibank specifically, but it did mention the U.S. government’s partial ownership of Banamex, Mexico’s number 2 bank.
The issue over Banamex’s ownership is a contentious debate in the Mexican Senate. Some senators insist that Banamex is breaking the law and that Citibank should be forced to sell Banamex, which hit had purchased in 2001 for $12.5 billion. At the time, this was the biggest acquisition ever in Mexico.
Back in March, Mexico’s financial ministry ruled that Banamex wasn’t breaking the law, arguing that the rule didn’t apply because of the emergency caused by the financial crisis, but now that the financial crisis is over, critics of Citibank are taking up their fight again.
