Citibank: 52 MILLION FRAUD

Credits & Description:

Category: Crisis and Issue Management

Advertiser: CITIBANK

Product/Service: CRISIS MANAGEMENT

Agency: PERFECT RELATIONS

Chief Executive Officer: Valerie Pinto (Perfect Relations)

Director: Aman Hashmat (Perfect Relations)

Media placement: Crisis Management - Economic Times - 6 March 2011

Media placement: Crisis Management - Hindu Business Line - 6 March 2011

Media placement: Crisis Management - Indian Express - 7 March 2011



Summary of the Campaign

Summary:

A USD 52 million fraud committed by a manager was unearthed by Citibank itself who informed the RBI, SEBI, and other investigating authorities. Our PR agency identified Citibank’s need to reaffirm credibility for the bank and its operations in India, and communicate the facts of the case. Focus was also brought to the need for checks and balances, and wealth management practices of the entire banking industry as a whole. Forensic experts were instrumental in testifying that Citibank has provided a case study of how to monitor and capture such malpractices in time.



Client testimonial -

Faced with a USD 52 million fraud that threatened to negatively affect the credibility of Citibank within the country and across the world, a quick and effective media/crisis management strategy was essential – especially since the global CEO Mr. Vikram Pandit was due to visit in 45 days. The real time crisis management strategy and incisive decision making and support from the team not only helped arrest over 80% of the press coverage, but also shifted the press coverage from extremely negative to neutral within one week. This undoubtedly helped reaffirm Citibank’s credibility in India.

Madhavendra Das, VP – Corporate Communications, Citibank



The Situation

• An employee, under a fake scheme, collected money from various HNI clients to be invested in a custodian account (fake custodian) which would guarantee returns to the tune of over 25%

• However, the bank did not provide solutions to the investors in time. Hence, one high profiled investor filed a case against Vikram Pandit Global, CEO, Citibank and the entire management team. He also accused Citibank of hiding facts, covering the fraud, and having a lack of appropriate checks and balances. This led to the existing customers withdrawing money from the bank.

• Despite having an agency on record, Citibank hired the advisory to manage its crisis, and take over almost instantly.



The Goal

Brief by Citibank

• The fraud was centered only to one branch. because of its checks and balances, it was able to stop malpractices in time

• The scam was unearthed by Citibank who informed the RBI, SEBI, and other investigating authorities

• This news made headlines and front page stories, heavily damaging Citibank globally, especially India.

• At the background of this, Vikram Pandit, Global CEO was scheduled to visit the country in 45 days.



Objectives

• Reaffirm credibility for the bank and its operations in India

• Arrest negative press

• Communicate facts of the case - Citibank had itself unearthed the fraud

• Assist in real time crisis management

• Matter should be settled before the visit of Mr. Pandit



The Strategy

1. First manage the case at hand with facts assessment in real time, working in sync with the lawyers



2. As Delhi bureaus don’t have banking and finance knowledge and the journalists in Mumbai are more familiar with the bank as its operations, move the coverage from Delhi to Mumbai by sharing new developments on the case with media in Mumbai



3. Shift the focus from Citibank towards the industry, making the fraud an issue for the industry to worry about – stating this could happen to any bank – question wealth management practices across banks



4. Use third party references like forensic experts to talk about difficulties in unearthing such a fraud, and how Citibank provided a case study of how to monitor and capture such malpractices in time



5. Media influencer outreach program to ensure background preparation before Mr. Pandit’s visit



Execution

1. Crisis Management team was activated, which involved the CEO, Media intelligence head, public affairs head and monitoring specialists to track the media and police, on a real time basis

2. A statement was developed comprising the facts of the case and Citibank’s stand on the matter

3. Every newspaper beat journalist was contacted, along with media at the desk to ensure no story was published without a Citibank perspective

4. Feature stories around checks and balances to be adopted by banks was floated amongst the media

5. Third party debates on unearthing such frauds with two pro-Citibank spokespersons and one non-pro Citibank support resulted in stories on the op-ed pages of several publications

6. A thorough media round by India’s senior management to arrest all queries around the matter before the visit of Mr. Pandit

7. Real time intelligence reports

8. Controlled media engagement program for Vikram Pandit’s visit – one exclusive with the Economic Times editor, followed by a round table with banking editors of other media houses



Documented Results

• Reaffirmed credibility for the bank and its operations in India

• Arrested negative press

• Communicated the facts of the case that Citibank had itself unearthed the fraud

• Assisted in real time crisis management

• Matter was settled before the visit of Mr. Pandit



Key achievements

• Ability to arrest coverage in 80% of the cases

• From Extremely negative front page coverage to neutral coverage in one week of being hired

Managing the Global CEO’s visit just 45 days after the largest scam in wealth management, and no negative coverage of reference to the issue was definitely an achievement proving our media relations and crisis handling capabilities