S. AFRICA CITICORP STAFF CHALLENGE DISINVESTMENT
South African staff of the U.S.
Bank Citicorp <CCI> said they will challenge its plans to sell
local operations and withdraw from the country.
    Employees said they had written to Citicorp chief executive
John Reed protesting against the way the disinvestment deal has
been handled. They said that they were not consulted on the
sale of Citicorp's local subsidiary, Citibank N.A. Ltd, to
South Africa's First National Bank <BCLJ.J>.
    The letter, signed by most of the bank's 175 staff, hints
at legal action against Citicorp unless it reviews the
disinvestment arrangement.
    "We are seriously considering legal action," a senior
Citibank employee told Reuters. "There has been no consultation
with South African staff and that runs contrary to American
corporate thinking in this country," he added.
    Citicorp announced the 130 mln rand cash sale on Tuesday
with an effective date of July 1.
    First National Bank's managing director, Chris Ball, said
his bank was essentially buying the skills of Citibank's
specialist employees and disclosed that the American bank's
assets in South Africa totalled only 15 mln rand.
    Ball indicated that the bank's staff had been told of the
sale and agreed to stay on in the bank's employ.
    Citibank's staff, 40 pct of whom are black, have complained
that the disinvestment accord bars local employees from jobs
with Citicorp anywhere in the world for five years.
    They say that this provision amounts to a restraint clause
which is legally challengeable. This could threaten the
divestment plan, say industry sources, since most of the
purchase price, as Ball said, is for employee skills and
expertise and not assets.
    The Citibank employee challenge is seen as more important
than a previous, ultimately unsuccessful, challenge on job
security issues by General Motors employees after the U.S.
Automaker announced its pull out, because valuable managers and
other key staff are involved in protest.
    The employees assert that the Citicorp sale, unlike similar
disinvestment moves announced this week by <Ford Motor Co> and
<ITT Corp>, include no portion of South African profits for
local employees or black community projects.
    "We always thought they would offer a settlement to staff
here in keeping with their image as an equal opportunity
employer," said a senior black employee, adding "We had no idea
that the age of slavery was still alive."
 REUTER
