Hero Group said on Friday its exposure in the alleged financial fraud unearthed at Citigroup’s Gurgaon branch in Haryana was Rs 28.75 crore and that it was taking action to recover its dues. On December 28, US-based Citigroup had said it was investigating a set of suspicious transactions based on what it said were forged documents by an employee at a branch in India.
A person familiar with the matter had said the transactions may involve between Rs 300-400 crore. “The (Hero) Group is taking appropriate action and has also initiated dialogue with relevant authorities and Citibank to recover its dues,” the Indian firm said in a statement.
Hero said it had made the investments as part of a routine treasury operation and was “disappointed to learn that it has become a victim of the fraud under question”.
Hero group owns 26% stake in No. 1 Indian motorcycle maker Hero Honda Motors. Earlier this month, Hero agreed to buy Honda Motor’s 26% stake in Hero Honda for an undisclosed sum. Hero on Friday said Hero Honda did not have any involvement in any of the investments related to the case.
Police questions Hero Corp CFO in Citibank fraud
Police today questioned Chief Financial Officer of Hero Corporate Services over investment with a Citibank official suspected to be involved in a Rs 300 crore fraud even as they claim that the money was safe. Brijmohan Lal Munjal-led Hero Group meanwhile admitted today that its exposure to the fraud allegedly done by Citibank’s Gurgaon branch Relationship Manager Shivraj Puri is to the tune of Rs 28.75 crore and it was done through its entities.
Hero Corporate Services Ltd CFO Sanjay Gupta and senior officials of the brokerage firms Religare and Bonanza were called by Police to ascertain the money trail into the whole episode. Gurgaon Police Commissioner S S Deswal said that Gupta was called as part of investigations as a major chunk of the money has gone into brokerage firms–Religare and Bonanza– whose officials were also called for questioning.