Citicorp Chairman Walter Wriston, in a soon-to-be-published magazine interview, claims that former Citibank employe David Edwards was fired be cause he was "totally incompetent," not because he accused the bank of improprieties in its overseas money operations.

Wriston, in his first published response to the Edwards case, said the former employe's "famous accusations didn't arrive until after he was dismissed." Wriston made the comments during an interview in the March issue of "Executive," the magazine of the Cornell University Graduate School of Business.

Edwards, who worked as a European money officer for the bank, has since sued Citibank for $14 million charging "wrongful dismissal."

In his interview, Wriston said that Edwards had been warned about his performance. "He was warned, he was offered another job and he came back and wrote a letter saying that we should subsidize his apartment and pay him money to write a book," Wriston said. "We rejected that."

Wriston's comments contradict at least some of the documents that have been offered in evidence in the case, however.

In a Dec. 14, 1977 letter requesting Edward's resignation. Citibank Executive Vice President Thomas Theobald referred to Edwards' allegations at length, in fact citing them as reason for his dismissal.

"As you are to some extent aware, and have been informed by your supervisors, these allegations (that the bank was engaging in illegal currency trading practices) have been the subject of intensive investigations by Citibank's Comptroller's Division and others since you first made them more than two years ago," Theobald wrote.

"We have... concluded that your continued allegations were detrimental to the best interests of Citibank," Theobald wrote. "Therefore, we request your immediate resignation."

In a subsequent exchange of letters, Edwards refused to resign voluntarily.

Reached by telephone yesterday, Edwards said Wriston's allegations "make me wonder if the chairman of the board and the directors really know what's going on. I raised these issues for over two and a half years in the corporate family, and for my efforts I was fired. Now it appears I am being maligned."

Edwards has alleged that he had attempted continually to alert bank higher ups to the fact that the bank's practice of "parking" holdings in various European currencies in the bank's Nassau branch -- in an attempt to avoid taxes and currency laws in several European countries -- was probably illegal. For his efforts, Edwards claims, he was fired.

"As far as the parking [of] transactions is concerned," Wriston said in his interview, "you can say that's an artifical transaction; but then you have to say it's artificial that the sun rises in the East and sets in the West."

He contended that world banking is a 24-hour-a-day business that involves the handing off from one part of the world to another of millions of dollars.

"If you ask me whether some of them [the transactions] were wrong, I would say on an actuarial basis they had to be. Did we do something wrong intentionally? The answer is no," Wriston added.

A Citibank investigation of the Edwards charges by the accounting firm of Peat, Marwick, Mitchell and the bank's law firm, Sherman and Sterling, acknowledged that the bank may have violated tax and currency trading laws in five of the seven nations investigated.

Meanwhile, Citibank has moved in New York State Supreme Court to have Edwards' suit dismissed. The bank contends that Edwards was "an employe terminable at will," and that his court papers "have attempted to evade this relatively simple point."