By Stephen Mayne, Crikey’s business commentator


The
world’s biggest bank has copped one of the world’s biggest banking
losses over what was arguably the world’s biggest corporate collapse.
Yep, Citibank has just chipped in US$2 billion for its role in the
deceit that was collapsed energy giant Enron.

Having also handed
over US$2.6 billion to settle litigation over the world record fraud at
Worldcom, Citigroup is clearly paying a heavy price for its role in
these deceptions. However, the world’s biggest bank is by no means in
any strife.

Its shares closed at US$47.64 overnight, not far shy
of its 12-month high of US$49.99 and it’s still worth a lazy $325
billion – equivalent to the value of our Big Four banks, plus Telstra,
News Corp and Rio Tinto.

What’s a $6 billion hit between friends when your net worth is almost half the entire value of the Australian stockmarket?

The
US really does seem to love a big corporate settlement with regulators.
Only last week, pharmaceutical giant Bristol-Meyers Squibb settled some
accounting fraud charges with the SEC for US$150 million as you can see
here.

Bank of America and FleetBoston recently agreed to stump up a US$675 million settlement
with New York attorney general Eliot Spitzer over improper mutual fund
trading and then you have the $2 billion-plus paid out by the cream of
Wall Street’s investment banks for dodgy analyst practices and advice
during the dotcom boom.

And what about good ole Qwest
Communications, which merged with Sol Trujillo’s old company US West
during the dotcom boom in a claimed US$35 billion scrip takeover? Sol
bailed out immediately after the merger but the Midwest regional
telecommunications giant agreed to pay US$250 million to settle an SEC
investigation into its accounting practices in 2002 as you can see here.

When
things go wrong in corporate Australia, our settlements just never seem
to really cut the mustard. These are some of the biggest payouts we can
come up with:

Fluor Daniel: paid $155 million to Minara
Resources (the old Anaconda Nickel) for flaws in the design and
construction of the giant Murrin Murrin laterite nickel project in WA.

Air New Zealand: paid $150 million to the administrators of Ansett in settlement of all potential claims.

Tricontinental:
the auditors of the failed Victorian investment bank, KPMG, chipped in
$129 million settling a claim by the state of Victoria in December 1993.

GIO:
23,000 minority shareholders who followed the board’s advice and
rejected a $5.35-a-share takeover bid from AMP received a settlement of
$112 million two years ago.

Bond Corporation: Arthur Andersen handed over $100 million three years ago for the Bond Corp audits in the late 1980s and early 1990s.

CRIKEY:
We’ll attempt to list the biggest global settlements and their
Australian equivalents in the coming days, so email your suggestions
through to [email protected].