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FBN’s Charlie Gasparino on what led Citigroup’s board to oust Vikram Pandit as CEO of the firm.
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Says it was his decision -- -- Citigroup president CEO which I guess Frida credit not take an hour.
He's carefully and -- -- where we should point out that he officially resign right so brightly on the board allowed him to resemble what sources tell fox -- network.
It -- Vikram Pandit was the word is generally -- ousted.
The board alerted him last night sources tell the Fox Business Network that and lost confidence in his ability to lead the firm at that point the board.
Is the the two sizes to say -- -- he's at that point I should point out the board then alerted regulators got it called all the regulators say here.
Politically and that in the states CEO -- -- ahead of the may be what did.
One of the biggest systemically important banks in the world Citigroup is leaving so that's essentially that would unfolded why did -- them full last night.
Well -- and they had earnings yesterday right.
This is what we understand the last thing they want to do this new CEO want to do.
Who spend 90% of his time talking about Vikram Pandit and why he was leaving during an earnings yeah -- so they so they rolled it out this way.
After the market closed they told him.
And then at that point you know the decision was made this morning what's what's pulled the trigger why did it what would it have come down to.
Listen there may be another story here arms continuing to look and has always conspiracy theories.
Before what I understand my best sources that are close to people at Citigroup close to the board member.
Members are telling me it came down to the final straw.
That was the SSB valuation member.
They -- -- was supporting the be sold sums reported to Morgan Stanley in a complex deal -- it was Germany at the height of the financial crisis would -- -- unload assets.
At everything every year it's we're -- has an option to buy more.
The problem was this time is that they kept the peace remaining on the balance sheet that they just sold to Morgan Stanley for more.
-- it was worth they had an independent arbiter come in the independent arbiter said.
You keep -- it on five billion dollars more than it should be so you're gonna have to take a charge of five billion dollars.
That according to what from what I heard was like you know the straw the broke the camel's back but -- a video at sixty member.
He said he was pittance Citigroup was good on the stress tests they weren't they could return capital they couldn't do buybacks.
They couldn't basically help investors with this stock it's generally dead in the water.
And there's a lot of other stuff in between but that's SSB thing was the final straw and I'll -- saw -- -- say this when you write these stories.
You know we -- at when I was at the Wall Street Journal there's a you know you don't quite safe fired OK that's a very legal -- it means that you know we put the -- he had -- did something really wrong outstanding ousted his what.
Goes on we have lost confidence -- when you wanna go.
We'd like you to go now we're back you know and that's what -- -- -- -- car preemptive -- You know and I know there's another network overreaction on the not another network but a specific reporter at another network that's.
Saying that you know is this person -- -- took to get Pandit and she she believes that he couldn't believe what he says in terms of -- -- -- -- on his own accord I will say this just forget about what I just told you.
It defies.
A certain logic here if you know any of these if you know -- -- CEO's the listing these guys wanna do is leave like this with their shirt hanging out their back.
It's not becoming its its its fifth at a huge blow up quite like you know what forget it automatic -- help you know what a less anywhere unless they were taken away his.
We know.
I privileges to the to the yacht club and I have no idea what that this but you know if you think about it -- takes a cut today.
So what is a huge compensation plan in in in place over -- for all the all these guys.
The it's the office this so this is there that you office itself which attracts these people.
To stay true in a job as a CEO of one of the biggest banks -- world -- supposed to be unemployed.
So.
You know I -- just -- -- forget what I tell you think of the logic there's no logic in him just wanting to leave.
Right right right that said though.
He's been under harsh criticism since the financial crisis right because half of the fact that he's never been a formal commercial banker he had this hedge fund.
-- actually shares on the record say let's no heat let's -- he couldn't execute T -- Wachovia deal done -- back well let's let's.
Back up a little bit who Vikram candidates Vikram Pandit was alone time Morgan Stanley executive wanna consider one of the smartest guys -- more recently still I mean its value should very sharp.
Went into doesn't fight when there was an uprising inside Morgan Stanley bankers want to take over the place get rid of Phil Purcell who was from the dean Witter when he -- dean -- Morgan Stanley.
Back in 1997.
Purcell was the CEO John Mack left over that then came a few years later they wanted Purcell out the guy they -- to to -- point in that job.
Was Vikram Pandit and essentially.
You know the -- the -- was uncovered.
Pull up Purcell fired Pandit got rid of everybody that was behind a lot of people left.
A good job Mac eventually came -- remember that's where he came from when he left Morgan Stanley he started this hedge fund that was called old laurel -- capital.
Totally -- an assault for 800 million dollar Britain.
Million dollars to Citigroup -- 165 billion -- -- and I think about and think about that they've been old lane was essentially terminated they -- -- -- the hedge fund flow if -- for -- now why didn't Citigroup by that well I talked to Bob -- about this then that seek to lead board member.
It's one of the top guys number two essentially the number two executive at the firm what he told me is that it was his.
His decision to buy that part of it he advocated for because he wanted -- not just to hedge fund.
He wants to -- by Vikram Pandit to be the CEO divert the essentials successor a successor for chuck prince which eventually he became.
So.
You know this guy's not a guy with just what came from -- hedge fund -- worked at Citigroup.
He's a long time Wall Street executive Sheila Bair did think he was a -- there's no doubt about that.
And she'd like to -- -- was cutting with Wachovia you -- back in order to buy Wachovia and this is before Citigroup needed.
A second a -- that they need a second bite of the apple with federal assistance girls they were going on the I remembered the story here I was at brain index working out of something we do we broke the story.
On air on a Sunday what happened was they try to get the Wachovia deal done they can only do with federal system.
Wells did an end around around -- around Pandit went to Sheila Bair went to Wachovia and what it without federal assistance when that happened them.
Bank run began on Citigroup they need to go to Washington for another bail out there's been going out bigger bailed out -- that -- beginning and I guess right now at that point maybe different thank you so much thanks Charlie.
