Simmtech Corp. damaged by KIKO, claims Citibank N. A. over Fraud in NY court… creating international lawsuit
Simmtech Corp. damaged by foreign exchange derivative called KIKO sued Citi interrelated enterprises including Citibank N. A. for compensation amount to 73 million dollars(80 billion KW). Heads of global banks never had been claimed over KIKO related damage before, while branches in Republic of Korea had litigations several times. KIKO battle came into international lawsuit beyond domestic field.
Related industry announced in Oct. 4th that Simmtech filed a suit over Citibank N. A. at NY Supreme Court located in Manhattan, arguing the firm is responsible for aiding, inciting or plotting the fraud by deeply being involved in KIKO transaction Citibank of Korea Incorporate(CKI) initiated.
Upon complaint, plaintiff Simmtech Corp. insisted that ‘Citi Bank intentionally deceived risky nature of KIKO product and sold it to Simmtech Corp. as if it would be utilized as insurance standing on its expertise regarding advanced financing product’. Also, Simmtech Corp. made emphasize on the hidden fee structured in KIKO product which Simmtech has never been heard of. Simmtech Corp. held Citibank N. A. responsible for not supervising KCI’s such illegal behavior despite its acknowledgement on KIKO product. Especially, Simmtech Corp. pointed out that CKI, substantially ‘the same body’ with Citibank N. A., functioned as ‘calculation agent’ which is not supposed to be one-sided. Simmtech Corp. stated in complaint that “Citi Bank explained Simmtech Corp. KIKO product as hedging product suitable for managing risk caused by foreign exchange fluctuation, while it actually was quite risky investment product”, and also “There were various unfairness considering contract period, value of each option and selection on foreign exchange rate calculation agent”.
Simmtech Corp. joined 2-3 years of KIKO contract amount to 600 million dollar with CKI in 2006, but as foreign exchange rate of KRW/ USD which was in the middle of 900 won by the time KIKO contract was dealt with has sky-rocketed up to 1600 won, Simmtech Corp. has seen damages over 80 billion won including losses of 54.5 billion won in the 4th quarter of 2008.
MK requested Citibank N. A. for explanation upon specific issues alleged in the complaint, but Citibank N. A. resisted any of specific answering.
In this case, plaintiff is represented by attorney Kim Bong Jun, Bae Mun Kyung, and Carlton R. Asher under KIM&BAE P. C., specialized in U. S. Security Law and Commercial Law.
Myung Soo Kim, Yong Bum Park, Jung Hong Jeon, Reporter
