Bengaluru: The Bengaluru Police on Tuesday arrested a senior executive of multinational financial services company Goldman Sachs on charges of fraud and misappropriation. The executive — a vice-president who was part of the forex and equity settlements part of the company — was held for cheating and criminal breach of trust after a police complaint was filed on Sunday.
Ashwani Jhunjhunwala, the vice-president in question, and another aide, Vedant Rungta, were arrested.
Jhunjhunwala allegedly transferred $5.4 million (Rs 38.8 crore) from the company's account to a private one abroad. Absconding since Monday, he was arrested on Tuesday morning. The company had filed a complaint registered under Sections 419 and 420 (related to cheating and dishonesty) and 408 and 409 (relating to criminal breach of trust by an employee) of the Indian Penal Code (IPC).
"He had access to another financial manager's account. So he used it to transfer the money to himself. It happened within a span of just 10 minutes on September 4. The company has an internal mechanism where this suspect transaction came to light. They found out within two hours and questioned him. He has apparently admitted to the transfer of money in the company, and is being interrogated by the police team right now," said Deputy Commissioner of Police (Whitefield) MN Anucheth.
The company said in a statement that Jhunjhunwala has been dismissed with immediate effect and they were engaged with the authorities to activate criminal proceedings. The police said the bank concerned was alerted and the money was transferred back to the company.
According to the police, the company's complaint was filed by its legal head Abhishek Parsheera. It said that Jhunjhunwala recently lost money in online gaming, besides having taken some personal loans, all of which led to this personal financial crisis. Last month, he had tried to increase the personal loan he had taken from a bank, but his application was rejected as he had defaulted on six earlier payments.
The money misappropriated from the company's account was transferred to the account of a company called Synergy Wisdom Ltd, which has an account in a bank in Hong Kong. Jhunjhunwala allegedly misused access to a junior's office system to make the transfer so that his role wouldn't come under the scanner. However, the company was able to track his movements based on CCTV footage.
The complaint filed by the company's legal head states: "Ashwani has cheated the complainant by fraudulently transferring 5.4 million USD -- approx INR 38 crore -- to a third-party bank account for unauthorised purposes and thereby making wrongful gains."
Goldman Sachs conducted its own internal inquiry, questioning three of its other employees, all of who report to Jhunjhunwala. The trio said Jhunjhunwala gained access to their computer systems on the pretext of reviewing their work and sent them away on errands while he used their systems to set up a third-party settlement instruction that enabled the money transfer.
One employee, Gaurav Mishra, suspected something amiss and checked the use of his system, and realised that a transaction had taken place that he did not recall doing. The matter was escalated after which the company was able to match the timing of Jhunjhunwala's use of the system with the time-stamp on the computer when the transaction was approved.
On questioning, Jhunjhunwala apparently admitted to having created and authenticated the transaction while sending three employees -- Mishra and two others, Sujith Appaiah and Abhishek Yadav -- away from their desks separately, while they were logged in. He has also admitted to transferring the money in two tranches.
"He is cooperating with the investigators. We are on the lookout for another person who has done this in the past, an ex-employee of Goldman Sachs, who helped him pull off this fraud," said Anucheth.
Rungta, a 28-year-old resident of Bengaluru, allegedly motivated Jhunjhunwala to have attempted the siphoning of funds last week. As Jhunjhunwala had lost nearly Rs 47 lakh in online poker and had other loans from banks and other individuals, he had got in touch with Rungta through social media. He had known that Rungta had earlier perpetrated fraud against the company.
Jhunjhunwala will be produced before a magistrate on Wednesday.
Jhunjhunwala's description on professional networking site LinkedIn says he is an MBA-graduate specialising in finance and has over 14 years of experience in capital market operations and project management on financial consultancy. He has earlier worked with Tata Consultancy Services.