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By Che Odom
Feb. 19 — Citigroup Inc. stockholders may be voting on a shareholder resolution calling for an independent board committee to examine whether divestiture of all non-core banking business segments would enhance shareholder value, as a result of a Feb. 18 determination by the SEC staff.
In a “no action” letter posted to the agency's website Feb. 19, the Securities and Exchange Commission's Division of Corporation Finance said it could not concur with Citigroup's contention that shareholder Bartlett Naylor's resolution could be excluded from the company's proxy materials.
In his Nov. 11, 2015, submission to Citigroup, Naylor said that some investors are concerned that a “mega-bank” like Citigroup may be not only “too big to fail,” but also “too big to manage” effectively so as to contain risks that may spread across the company's business segments.
Naylor is a financial policy advocate at Public Citizen.
Citigroup argued that the proposal could be omitted because it failed to include material information regarding costs of a report to be produced by the committee and because it has already been substantially implemented.
In contending that Naylor's proposal has been substantially implemented, the bank pointed to its Citi Holdings segment, which it said is composed entirely of non-core assets that the company “has not yet sold but currently intends to exit.”
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The no-action letter is available at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8/2016/bartlettnaylor021816-14a8.pdf.
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