Allegation of irregularities at Citibank Services Japan

Sunday, December 26 2004 @ 11:20 PM JST

Contributed by: Y.Yamamoto

(TFP Administrator: I'm just posting, on his or her behalf, an anonymous e-mail we have recently received. Anyone who has additional information, or a comment to make, in relation to the alleged irregularities is solicited to post it on our Whistle-blowers' BB.)

Recently, Citibank Japan CEO Douglas Peterson told a parliamentary finance committee that lax corporate governance and an "aggressive sales culture" were behind abuses at the private banking unit, ordered to be closed by regulators in September. I am not 100% sure, but I would like to report another possible questionable activity.

DP recently made this apology, but there is reason to wonder if it is sincere. Citigroup still has major internal audit and compliance problems, including:

- Sourcing of unlicensed vendors
- Insufficient due diligence regarding vendor contracts
- Employment of foreign staff who sometimes lack proper work visas

These practices are grave violations of the Japanese labor law because:

- Citibank recently dismissed many Japanese employees
- Citibank engaged unlicensed outsourcing firms
- Japanese employees were replaced with illegal labor

As I say, I am not 100% sure, but I think that some of the temporary or contract staff working for Citigroup in CSJ (Citigroup Services Japan) and NikkoCitigroup's technology division in Citigroup's Tennozu Building 4F and 5F (Citigroup Services Japan, 2-3-14 Higashi-Shinagawa, Shingawa-Ku, Tokyo 140-8639, Japan), as well as their building in Harumi Triton Square, Building X, 34F, maybe even 35F(Harumi Triton Square Harumi 1-8-16, Chuo-ku, Tokyo 104-6203) have been working in Japan for Citigroup through various temporary staff dispatch vendors before they officially obtained their proper Japanese work visas. I am no sure, but I think they worked through vendors for Citigroup while on tourist visas.

Citigroup does participate in the selection of these temporary staff sent by vendors by holding interviews with these staff and their vendors (in person and via telephone) and therefore must take responsibility for confirming the proper visa status of those staff. Some of these staff may still not have the proper visas, but I do not know. The fact is that they (at least one person I am pretty sure of) did work for Citigroup without the proper visa for some period of time (maybe a few weeks) before obtaining the proper visa. Illegal activities are still

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