General MotorsThe federal government's stake in banking-giant Citigroup (C) presents a conflict of interest in General Motors' pending initial public offering, the automaker said Thursday.

The U.S. Treasury owns about 3.6 billion shares of Citigroup's common stock, equivalent to a 12.4% stake, which constitutes a conflict under financial industry rules, GM said in a filing with the Securities and Exchange Commission. Treasury also holds a 61% stake in the Detroit auto giant.

The circumstances require that Citigroup get consent before selling GM shares to clients with discretionary accounts.

GM is expected to begin a "road show" for potential investors next month after the Nov. 2 midterm elections as the government begins winding down its stake in the automaker. The company filed a registration statement for its IPO in August and amended it Thursday.

GM reportedly hopes to raise $8 billion to $10 billion through the sale of stock, much smaller than first planned. Though the company has yet to set a price for its shares, Chairman Ed Whitacre has predicted that GM's common stock will be priced between $20 and $25 a share to make them affordable to small investors.

GM plans to set aside 5% of its common shares to allow employees, retirees and dealers to purchase shares at the IPO price. The parties have until Oct. 22 to sign up to participate in the program and must invest at least $1,000.

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joelsplaces

This sounds like the two Jewish brother's that were arguing about who should be the 1 to sell the bullet's to the Arab.There father sold the Arab the gun.

October 15 2010 at 12:50 AM Report abuse +1 rate up rate down Reply
Dennis

DLCCARS44 THEY SHOULD HAVE TO MAKE GOOD ON ALL THE STOCK HOLDERS THEY HUNG OUT TO DRY WHEN THEY GOT BAILED OUT THEN & ONLY THEN THEY SHOULD BE ABLE TO HAVE A IPO DENNIS

October 14 2010 at 9:31 PM Report abuse +2 rate up rate down Reply
MSmailbox

I've always wondered how they managed the "conflict of interests..." Stock is the easy part. What happens when your boss is also in charge of the people who are running OSHA and the EPA? I think that the auto industry ought to remain isolated from the government... Hindsight really IS 20/20!

October 14 2010 at 6:24 PM Report abuse +3 rate up rate down Reply
kv37

I wouldn't pay more than a dollar. Isn't that about where the last GM stock ended up to be.

October 14 2010 at 5:02 PM Report abuse +2 rate up rate down Reply