Citi, the US investment bank, is facing questions from disgruntled investors, following an ill-timed €100m (£70m) sale of shares in a Spanish renewables energy company.
Citi sold the shares in Abengoa, a Seville-based company, in mid-July at a price of €2.80. They are now trading at around €1.80 after first falling close to €1.
Days after the share salethe Spanish company revealed it was seeking to raise €650m of capital and dispose of €500m of assets.
Abengoa also told the market on Friday last week that its free cash-flow for the year would be as much as €800m lower than previously forecast. The group held a three-hour long conference call with investors after publication of its results.
One banker said that investors who had subscribed for the shares in July were furious with Citi. “There are big questions over the bank’s due diligence on this issue.”
There are limitations to how much Citi would have been entitled to know about subsequent events at the group, but investors are questioning why the bankers on the deal did not inquire further about its cash position.
Citi declined to comment.
Abengoa, which employs around 20,000 people across the world, is engaged in a number of sectors, including energy, telecoms, transport and the environment.
