Citi's mooncake expenses investigation has left some scars on staff in China
It's not the right time of year for gifting mooncakes in China, but when the time comes again in October, staff at Citi are likely to be careful how they expense them.
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Sources at the bank say staff at Citi's Chinese operation were subject to a wide-ranging investigation in 2023 that began with mooncakes and expanded to cover expenses across the board.
"What started as a minor compliance issue involving mooncakes spiralled into a massive internal investigation that's caused a lot of disruption," says one Citi insider. "There have been numerous terminations and resignations and people are being punished for seemingly trivial issues like unexplained taxi rides from years ago or process errors in expense claims."
Citi declined to comment on the issue, which is understood to have largely occurred two years ago. However, insiders at the bank say it resulted in the delay of 2024 bonuses and performance reviews for around 100 people.
The investigation is understood to have applied only to Citi employees in China and not to those in Singapore or Hong Kong. It's thought to have examined expenses over a five-year period, creating stress for those involved. "How are people supposed to defend themselves for things that happened so long ago?" says one insider. "Memories fade, and it's impossible to dig up documentation for expenses so far back."
As banks like Goldman and Morgan Stanley renew their focus on Asia, the scars left by the scandal may make Citi staff easy to poach. There are suspicions that the investigation was used by the bank to cut costs and to lay people off. Morale is thought to have suffered. Staff dismissed during the investigation are unable to find new jobs due to black markets on their regulatory records. Mooncakes won't be expensed again.
Citi isn't the only bank to crack down on expenses in Asia. Last year, Bank of Singapore investigated up to 900 people for medical insurance claims.
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