Seems that Citibank has suffered over ten billion dollars loss in the last quarter due to the ongoing subprime loan crisis in the US. Several sovereign funds such as Abu Dhabi and Temasek of Singapore have bought up hefty chunks of the company. They have also bought into Merrill Lynch and may buy into several banks and financial institutions in the US. These sovereign funds belong to the respective governments and hence do not disclose their holdings and functions to the public. They are opaque and cannot be investigated. All the fund managers are emphatic that they do not seek positions on the boards of the US entities and will not seek controlling interest. Which begs the question, why put in billions of dollars without seeking any powers to protect your investment. When the Chinese wanted to buy Unocal, an American oil company, there was such a furore about Chinese control of critical assets that they withdrew from the bid. Same was the case when Dubai Ports bought P&O Ferries which controlled ports in the US. By investing in banks and financial institutions, which in turn, can invest in any American industry these sovereign firms are getting in through the back door which is innocent. More interesting for me are investments in defence firms such as Lockheed Martin, Boeing and such like. Will these funds get to have an insider knowledge of what is going on in the US defence industries by having hefty stakes in financial institutions. We will wait for the fall out.