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Citibank fraud investigations gain momentum

Dec 31, 2010 09:13 PM IST Business Business
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New Delhi: The probe into the Rs 300 crore Citibank fraud has gained momentum. The Gurgaon Police have questioned executives from brokerage firms Religare and Bonanza and the CFO of the Hero Group, Sanjay Gupta.

Sources say Citibank's Shivraj Puri channeled funds from his clients to his own account and then passed on to brokerage accounts at Bonanza and Religare.

"We are finding out the mode of the payment, other related documents and what promises they made regarding these investments. We are verifying…and one of the brokerage firms is owned by Sanjay Gupta," said Haryana Police Commissioner S S Deswal.

The Reserve Bank of India (RBI) has also initiated investigations in the case.

Meanwhile, the Hero Group has issued a clarification on its CFO's questioning. "Some of the Hero Honda entities are victims of the fraud conducted through one of the Citibank branches in Gurgaon. Pawan Munjal or Brijmohan Lal or the Hero Honda Motors Limited has nothing to do with this matter," said the Group.

But there is no involvement of black money in any of the transactions as most of them were either made through cheques or drafts or some other form of documentation. The police are also keeping in touch with the victims. However they have not yet filed any formal complaints. Police also confirmed that none of the stock listed companies have placed their money in this dubious deal.

The extent of the scam has worried investors. Police have traced a staggering 80 bank accounts operated by Puri which have all been frozen. The police also said most of the victims are residents of Gurgaon.