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 As if Citigroup Inc. (NYSE:C) didn't have enough headaches, Japanese regulators are now ordering the banks unit there -- Citi Japan Ltd. -- to temporarily shut down sales activities at its retail businesses because it's not doing enough to prevent money laundering. Japan's Financial Services Agency suspended all sales activities from the bank's retail businesses, banning even advertising, from July 15 to Aug. 14, because of the issue. This marks the second time that Citi Japan has been hit with penalties over what the government deems poor oversight and monitoring of possible transactions with crime syndicates. The FSA suspended Citi's private banking business in September 2004 for similar reasons. Citi issued an apology saying that the suspension wouldn't restrict any activities with existing customers or affect its ability to serve its Corporate Banking Division clients. The suspension may throw a crimp in Citi's plans to divestment major units in Japan as it slims down and tries to repay $45 billion in U.S. bailout money. The Deal Pipeline reports that Sumitomo Trust & Banking Co. Ltd. has won the auction for Citi's Japanese asset management unit, Nikko Asset Management Co., with a bid worth more than $1.04 billion. (The Deal Pipeline subscribers can read the full story here.) It's already sold its Japanese brokerage and investment banking assets to Sumitomo Mitsui Financial Group for $5.9 billion. (The Deal Pipeline subscribers can read the full story here.) But it's having problems with the sale of NikkoCiti Trust and Banking Corp. as the buyer backed out of a $260.2 million deal last month. (The Deal Pipeline subscribers can read the full story here.) - George White See Citi apology See Dealscape post on Citi's assets on the block See The Deal Pipeline story on Cit's I-bank sale (subscription required) See The Deal Pipeline story on scrapped NikkoCiti Trust deal (subscription required)
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