Wednesday, January 5, 2011

RBI starts investigating the Citibank scam


New Delhi: The Reserve Bank is investigating the Rs 300 crore fraud in Citibank's Gurgaon branch, which saw diversion of depositors funds in stock markets.
"RBI is investing the matter (Citi Bank fraud)," a key Reserve Bank source said.
The fraud at the Citibank's Gurgaon branch, involving diversion of depositors money into the stock market, was uncovered last week.
Several high networth individuals (HNIs), including promoters of Hero Group, were lured by Citibank's Relationship Manager Shivraj Puri, the main accused in the scam, into investing funds on promise of high returns.
Victims of the fraud have complained to the police that their securities were encashed without their knowledge.
Sanjeev Aggarwal, managing director of Helion Advisors, had on Tuesday filed an FIR with the local police, alleging he was cheated of his life's savings of Rs 32.43 crore in the fraud.
Besides senior officials of the bank, Aggarwal named Indian-born global CEO of the Citibank Vikram Pandit and Chairman William R Rhodes in the FIR that alleged criminal breach of trust, falsification of accounts, cheating and
criminal conspiracy by the bank officials.
Citibank, however, dismissed allegations of involvement of its senior executives in the fraud.
The local police on Wednesday ruled out the possibility of questioning Citibank's global CEO Vikram Pandit and other top honchos in connection with the scam.

Citibank fraud not a one-man show: petitioner


New Delhi: The petitioner in Citibank fraud case Sanjeev Aggarwal on Wednesday slammed Citibank, saying the multi-national bank should own up for whatever has gone wrong.
He said that he had sent many queries regarding unauthorised inflows in his account, but none of them were answered. Aggarwal said, "I came to know about this a month back, when we got a very cryptic call from Citibank officials, stating that there is a problem in Shivraj's account. Ever since, we have been in talks with them. Eventually, it led to my filing the FIR."
Stating that the fraud cannot be a one man show, he said, "Shivraj Puri was introduced to me three years back and has been managing our account since then. The problems started one year back. Shivraj Puri alone can't do such a huge fraud, others must be involved."

Aggarwal also stated that for the last one year, Puri was the only person from Citibank who visited them. He said, "That is the biggest surprise that when an account is depleting in Citibank's books, normally one would expect that multiple people would show up. Earlier, it did happen but in the last one year, he was the only one coming to see us."


Claiming to have lost Rs 33 crore in the Citibank fraud, Aggarwal said, "We have not been shown any SEBI document, it was a wealth management account." Aggarwal added that if Citibank doesn't agree with it, the police will decide on it.