Citigroup Sued for $347 Million After Death of Indonesian Client in Branch

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Citigroup Inc. (C)’s consumer banking unit, barred from adding clients to its credit-card and wealth management services in Indonesia after fraud allegations and the death of a card holder at a branch in Jakarta, was sued by the dead man’s wife for as much as 3 trillion rupiah ($347 million).

Irzen Octa, 50, died on March 29 after he was “physically abused” at the Citibank branch, according to a lawsuit filed by his wife Esi Ronaldi in the central Jakarta district court today. Octa had met with the bank’s debt collectors, disputing the amount he owed on his credit card, according to the lawsuit.

Citigroup, which has operated in Indonesia since 1968, faces further sanctions depending on the result of an investigation by the Indonesian central bank into Octa’s death and into allegations that a bank employee stole money from clients. Indonesian lawmakers on April 8 recommended that Citigroup’s New York headquarters take responsibility for the incidents.

Citigroup spokesman Richard Tesvich said the bank hasn’t received the lawsuit and it was inappropriate to comment on it at this time.

“As we have stated previously, our internal investigation has found no indication that Mr. Octa was physically harmed at our offices,” he said. “We continue to cooperate fully with the police investigation.”
Police Suspects

Octa’s death led Indonesian lawmakers to ask Bank Indonesia to revise regulations on debt-collection practices, and the police to probe if there was criminal behavior at the bank’s local unit. Four people are suspected of being involved in the death, Gatot Eddy Pramono, head of the South Jakarta Police District, said on April 6.

Citigroup reported the alleged theft by Inong Malinda Dee, a relationship manager who handled more than 200 accounts of about 500 million rupiah each, to the police following a complaint by a client on March 11.

The lender said last month it may invest as much as $2 billion in its Asian consumer banking unit in the next three years as it taps the region’s growing middle class. Citigroup’s Indonesian consumer bank had revenue of $354 million last year, according to a presentation Chief Executive Officer Vikram Pandit gave last month.

The case is Esi Ronaldi v Citibank N.A. and Citibank N.A. Indonesia, Indonesia in the Central Jakarta District Court.

bloomberg.com