Top British banker quits Citigroup

BRITISH-born banker Sir Deryck Maughan, who rose from coal miner's son to become one of the financial world's high-fliers, has been forced to resign as chairman and chief executive of Citigroup International for his role in last month's forced closure of the firm's private bank in Japan.

In addition, Maughan, one of Britain's most senior executives in the rarified top echelons of international investment banking, was ousted from his job as vice chairman of Citigroup.

Two other Citigroup executives, Thomas Jones, who headed investment management, and Peter Scaturro, who ran private banking and reported to Jones, also fell on their swords. No replacements for the executives have been named, a Citigroup spokeswoman said.

Japan's Financial Services Agency (FSA), the bank regulator, told the commercial banking subsidiary of Citigroup Inc to suspend operations after a swoop by investigators found fundamental problems in its internal controls.

Japanese regulators say Citigroup failed to conduct proper checks against money laundering, and they also uncovered fraud in its retail unit.

Citigroup conducted an independent review into the disaster, which concluded executives shared responsibility for it, according to a leaked memo.

The firm's chief executive, Charles Prine, foreshadowed last week that heads would roll.

'We're taking very strong action,' he said. 'This is something that will not continue in this company, certainly while I'm in charge.'

Maughan's resignation spells an end to any claim he may have had on the top job at Citigroup, and tarnishes a previously glittering career. A former Treasury official in the pre-Thatcher years, Sir Deryck was knighted in 2002 for his contribution to British business interests in America.

His job at Citigroup entailed overseeing mergers and acquisitions and the firm's cross-marketing activities. He was also chairman of the Internet Operating Group and Citigroup Japan.

Before that he was chairman of Salomon Brothers from 1992 until 1997 when the business was acquired by Citigroup, after which he was made chief executive of Salomon Smith Barney.

Sir Deryck was then shareholder Warren Buffett's hand-picked appointment for the Salomon job, and led the embattled brokerage back on track after it had been laid low by a Treasury notes auction scandal in 1991.

Sir Deryck, 56, made his name running the firm's Tokyo office.

He was appointed head of Citigroup International in 2002.