Gurgaon police not to question top honchos in Citi fraud case

Gurgaon, Jan 5 (PTI) Police on Wednesday ruled out the
possibility of questioning top executives of Citibank
including its global CEO Vikram Pandit in the Rs 300 crore
fraud case saying the chances of their involvement appears
remote.

However, a high networth individual, who lost
Rs 33 crore in the scam and has filed the FIR against Pandit
and others, attributed the episode to "systemic failure" and
that the fraud could not not have been perpetrated just by an
individual.
The fraud at the Citibank's Gurgaon branch in the
Indian state of Haryana, involving diversion of depositors
money into the stock market, was uncovered last week.
Gurgaon Police Commissioner S S Deswal ruled out
questioning of top Citibank executives including Pandit for
now now on the ground that their involvement fraud was
"remote".
"At this point of time the possibility of involvement
of global CEO...India head looks remote" Deswal told reporters
here.
However, he said more local staff of the bank could
be questioned.
The high networth individual and Managing Director of
Helion Advisors Sanjeev Aggarwal, who filed the FIR, described
the fraud as "systemic failure" and said that top executives
cannot escape their responsibilities.
The bank, however, dismissed his allegations and said
that "his claims against senior executives are completely
without basis and we intend to contest them vigorously".
It also said that it was the bank which lodged the FIR
in the case and was also investigating on its own.
Seeking return of his money, Aggarwal said, "I would be
very surprised if they left me in lurch".

Aggarwal had named Pandit, Citibak's Chairman William
R Rhodes, CFO John Gerspach and COO Doughlas Peterson (all
based in New York) and other senior officials in the FIR that
alleged criminal breach of trust, falsification of accounts,
cheating and criminal conspiracy by the bank officials.
Meanwhile, a two-member team of the market regulator
Securities and Exchange Board of India (SEBI) two-member team
questioned the alleged mastermind of the fraud Shivraj Puri,
Relationship Manager of Citibank, and Sanjay Gupta, Associate
Vice President (Accounts) of Hero Corporate Services.
The Sebi team also questioned the staff of the
brokerage firms -- Religare and Bonanza --through which the
funds were allegedly routed to stock markets.
Reserve Bank Deputy Governor K C Chakrabarty said in
Delhi that the central bank would look into the banking fraud.
"Every fraud is looked by regulator...where is the
question that Citibank fraud will not be looked at", he said.
The Hero Group, the biggest motorcycle manufacturer in
India, which reportedly had an exposure of Rs 250 crore in the
banking fraud, sent on leave two employees Ganpat Singh and
Gaurav Jain on leave suspecting their involvement in the scam.
They were working in the accounts department and could
have colluded with Hero's senior official Sanjay Gupta, who
was earlier arrested by the local police for his role in the
banking fraud, the company said.
"This is in addition to the suspension of Gupta by the
company. Further appropriate action will be taken after the
final outcome of the enquiry," the company said in
statement.PTI CORR
DBR