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Citigroup fires 11 over fraud in Mexican unit

US banking giant Citigroup on Wednesday said it has fired 11 more employees over accounting fraud involving its Mexican subsidiary.

NEW YORK: US banking giant Citigroup on Wednesday said it has fired 11 more employees over accounting fraud involving its Mexican subsidiary.

Michael Corbat, Citigroup chief executive, announced the action taken at Banco Nacional de Mexico (Banamex) in a memo to employees, saying the included four managing directors, two of them in Mexico.

The company earlier fired an employee who was believed to be "directly involved in the fraud," he said.

Corbat said that he expected that several other employees, "both inside and outside of Mexico" may receive disciplinary action before the bank's internal investigation ends.

The New York-based bank found two cases of fraud at Banamex, which became part of Citi in 2001.

According to Citi, Banamex extended credit to Oceanografia on the basis of bogus invoices from the energy services company and to another company which it has not identified.

Both companies are sub-contractors of Mexico's state-run oil monopoly Pemex.

The fraud is also under investigation by the US Securities and Exchange Commission and the US Department of Justice.

"While the last few months have been difficult, Banamex is an institution with a rich, 130-year history of providing exceptional banking services to its clients," Corbat said in the memo.

Citi announced in February that it was slashing US$235 million from its fourth-quarter and full-year 2013 financial results due to the recently discovered fraud.

Corbat said it was more difficult to calculate the impact to the bank's credibility. "Arguably, it is more damaging than the financial costs."

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