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The Securities Commission (SC) has granted a stockbroking licence to US banking giant Citigroup Inc, making it the seventh foreign company to be given the licence in Malaysia.

The licence is one of three allowed leading foreign firms under the 2008 Budget. Japan’s top brokerage, Nomura Holdings, received the first in September last year and has started its stockbroking operations here.

“We continue to receive strong interest from leading international firms to set up operations in Malaysia, including in the broking industry, indicating confidence in the prospects of our capital market,” SC chairman Tan Sri Zarinah Anwar said in a statement yesterday.

The regulator said Citi was expected to play an important role in increasing the flow of funds from the Middle East as it has a strong presence in the Gulf.

“Citi will be focusing its business model on foreign and domestic institutional business. Any variations to the business model are subject to the SC’s approval,” it said.

In a separate statement, Citi said the news “underlines its continued investment in Asia and its desire to play an expanded role in the local Malaysian capital market”.

“With Citi’s global reach and resources, we believe we can add value to the growth and development of the Malaysian capital markets,” Citibank Bhd chief executive officer Sanjeev Nanavati said.

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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.

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• Citigroup using Federal Rescue Fund to Buy Jetplane
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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