Trade Shares or Stocks in Bursa Malaysia|How to start Trading | Trade Stocks in Bursa Malaysia | How to Open Trading Account | How to Open CDS Account | What is Collateralised Trading | Discretionary Financing | Share Margin Financing | CDS Share Transfer | Securities Borrowing and Lending (SBL) | Regulated Short Selling (RSS) | Brokerage | Internet Trading Brokerage Discount | Cash Upfront Brokerage Discount | Clearing Fees | Contract Stamp Duties | Bursa Malaysia | Composite Index | Bursa News | Listed Companies News | Market News | Market Outlook

Citigroup reversed course on Tuesday, a day after a Treasury Department official called the struggling company and “told them it was unacceptable” to accept delivery of a new $42 million corporate jet, a senior administration official said.

The move comes as new Treasury Secretary Timothy Geithner tries to quickly bring more accountability and oversight to the much-maligned TARP program he now oversees.

Under that program, Citigroup has already received some $45 billion in government bailout funds, which is why a New York Post report about the scheduled delivery of the new jet sparked outrage.

White House Press Secretary Robert Gibbs said Monday the president believes private jets aren’t “the best use of money at this point” with America facing a financial crisis.

Citibank spokesman Michael Hanretta told CNN Tuesday the company has “no intent to take delivery of any new aircraft.”

This came after the company initially said on Monday it could not comment on whether it was purchasing the jet, citing security reasons. Hours later it reversed course, issuing a statement saying it signed a contract in 2005 for a replacement aircraft as part of a plan to reduce the number of planes it owns and cut operating costs. “Refusing delivery now would result in millions of dollars in penalties,” it said. “Citi is exploring all its options for these assets, including the potential sale or lease of the aircraft.”

Citigroup  paid $42 million for the corporate jet, according to a source familiar with the situation. The company will get most of that money back, but is likely to have to pay a penalty in the range of $3 million to $4 million, the source told CNN. The exact amount and terms were still being negotiated.

The luxury jet that was to be purchased is a Dassault Falcon 7X, which seats 12. It is so exclusive that Dassault says only 21 are operating around the world. It said the price is listed at $45 million.

Related Posts:

• Citigroup using Federal Rescue Fund to Buy Jetplane
• Citigroup received Malaysia stockbroking license

Pro Trade Shares found out how on of the  troubled banks in US is using their federal rescue fund:

Citigroup Inc, which has received $45 billion of capital from the government, is going through with plans to buy a $50 million corporate jet, a person familiar with the matter said.

The bank put in an order for the Dassault Falcon 7X two years ago and plans to accept delivery on the plane later this year, the source said.

Canceling the deal would have forced the bank to pay a multimillion-dollar fee, the person said.

Citigroup is selling two older Dassault jets, worth an estimated $27 million each, according to the New York Post, which was first to report that the bank was still buying the new plane.

Citigroup declined to comment on whether it was buying a new aircraft, but it said in a statement that it has strict policies regarding use of its aircraft, including encouraging executives to fly commercial whenever possible to reduce expenses. The bank said it has reduced its number of aircraft by two-thirds over the last eight years.

Related Posts:

• Treasury Department disapproves of Citigroup’s plan to Buy Jet
• Citigroup received Malaysia stockbroking license