Citibank's headquarters in Argentina inspected after CEO suspended in fallout from debt fight

BUENOS AIRES, Argentina – The central bank sent regulators to inspect Citibank’s local headquarters Monday after the leader of the branch was suspended amid a legal battle over Argentina’s debt.

Regulators are working to verify whether the bank was able to maintain normal operations following CEO Gabriel Ribisich’s suspension last week, the government news agency Telam said.

A Citibank spokesman reached Monday declined comment.

The dispute is the latest fallout from a long-standing legal battle between Argentina and a group of U.S. creditors that refused to accept debt swaps in 2005 and 2010.

U.S. District Judge Thomas Griesa in New York has ruled that Argentina can’t pay holders of its restructured debt without also paying the holdout funds.

Citibank had been processing bond payments for the restructured debt, but found itself in a tight situation when Griesa ruled last month that Citibank must cease making payments.

Following that ruling, Argentina threatened to revoke Citibank’s license to operate in this country if it didn’t continue processing the payments.

The bank appealed the U.S. order, and then reached an agreement with Griesa and holdout creditors allowing it to process payments through June and then transfer the repayment responsibility to another entity.

Ribisich was suspended last week in the wake of that deal.