U.S. Court Says 'Citi Group was Deeply Involved in KIKO Trade'
U.S. Court Says 'Citi Group was Deeply Involved in KIKO Trade'
  • By Jung Yeon-jin (info@koreaittimes.com)
  • 승인 2016.03.02 15:56
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Local tech company Simmtech, which lost around 85 billion won after investing in Citibank Korea's financial derivative Knock In Knock Out (KIKO), is now likely to get compensation.

The U.S federal appeals court ruled on Feb. 23 that, "Although the KIKO contract between Simmtech and Citibank Korea was traded in Korea, the U.S. court can hear the case,” meaning that the U.S. Citi Group is involved in the trading of KIKO product of Citibank Korea.

Since this was the first ruling that the KIKO-related cases can be heard in the U.S., the case is expected to draw attention from business and political circles.

Earlier in February of last year, a federal court in southern New York turned down the compensation for damages amounting to 85 billion won on the grounds that the KIKO contract was traded between Korean company Simmtech and Citibank Korea.

However, Simmtech appealed to the federal appeal court and is able to be tried in a year.

The tech firm filed a compensation suit against Citi Group, seeking 85 billion won in damages in August of 2013. The appeal court ruled that there were enough evidences that the U.S. Citi Group was deeply involved in Citibank Korea's trading KIKO product.

This can be interpreted that Citibank damaged Simmtech, which invested in KIKO, by disturbing the financial market through currency manipulation, and the proxy of this "fraud" is Citibank Korea.

Industry watchers said that Simmtech is likely to win because other multinational banks including Citibank were already imposed with fines amounting to trillions of won on the grounds of currency manipulation.

The tech exporter Simmtech invested in Citibank Korea's KIKO and lost around 85 billion won from 2006 to 2008. After the currency manipulation was revealed at the U.S. court, the local company filed a complaint to the court in August of 2013.

Regarding the issue, Citibank Korea's spokesperson declined to make comment, saying, "Since the case is being tried, there is nothing we can confirm now."


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