Citigroup India hit by Rs 4bn fraud

Citibank's Gurgaon branch stumbled upon a Rs 4bn fraud and forgery by a few of the employees at the retail banking unit. The US-based banking titan did not say how much money is involved, but reports suggest the transactions may involve between Rs 3bn and Rs 4bn. The alleged fraud was done by a person named Shiv Raj Puri, who has been working as a Relationship Manager for the past 7-8 years. The fraud was unearthed when the bank's Assistant Vice President Binu Soman noticed suspicious transactions in certain accounts at the Gurgaon branch. Citibank filed an FIR with the Gurgaon police after an internal probe revealed some suspicious transactions. Citibank has informed the RBI and SEBI about the fraud.



Shiv Raj Puri, the main accused in the Citibank fraud was arrested by the Gurgaon police and was remanded to seven days' custody. He had been absconding and a look-out circular was issued for him. Duty Magistrate Raj Kumar Yadav sent Puri to seven days' police custody, Gurgaon Police Commissioner S S Deswal said. Puri was produced before a special court as other courts were on winter vacation.

Puri managed to dupe high networth investors (HNIs) after forging documents, which he said was from market regulator SEBI. He then offered them lucrative returns on schemes which he claimed had Citibank's backing. SEBI denied the existence of the schemes. Citibank said it was investigating the fraud and assured customers their money was safe. Police has issued notices to the banks to seize all the accounts. It has formed five special teams to investigate the case.

Companies belonging to the Hero group invested Rs 2bn in Puri's account and Rs 1bn were invested by individuals. Puri, in turn, invested the money in five major brokerages, including Religare, Okaya and Bonanza. The police is also probing a brokerage named Norway Martin, purportedly owned by Puri's father.