The government today said that Reserve Bank of India (RBI) has conducted a special inquiry into Rs 460-crore Citibank fraud case and was in the process of completing its final report. ” RBI has conducted a special scrutiny of the related accounts at Citibank, Gurgaon (branch) and other connected accounts at other banks. The final report is being completed”, Minister of state for Finance Namo Narain Meena told the Lok Sabha in a written reply.
Several depositors and high-networth individuals ( HNIs )) were duped in the Rs 460.91 crore fraud which was engineered by a Citibank’s Global Wealth Manager Shivraj Puri who was working at Gurgaon branch of the bank.
The US-based Citibank is headed by Indian-born Vikram Pandit , who is currently on a visit to India. The government had in 2008 honoured Pandit with Padma Bhushan.
Pointing out that the fraud in the Citibank’s Gurgaon branch was going on since September 2009, the Minister said, “the major transactions took place between May 2010 and November 2010. The bank has furnished details of the fraud to the RBI in the Fraud Monitoring Report”.
Citibank’s manager Puri, Meena said, “perpetrated the fraud by mobilising funds to the tune of Rs 460.91 crore unauthorisidely from High Networth Individual (NHI) customers and certain corporate for the purpose of investing in stock market, assuring them high returns”.
While providing details of the modus operandi, the Minister said, Puri fabricated a circular of the Securities and Exchange Board of India to lure people into investing into accounts held by his accomplices Premnath, Shiela Premnath and Deeksha Puri.
The investors, Meena added, were even issued fake receipts/acknowledgements on Citibank’s stationary.
The funds thus collected through the “Premnath Account” were transferred to various brokerage houses for making investment in the securities market.
“There were 27 other accounts which had been opened in the (Citibank’s Gurgaon) branch in the names of Puri’s relatives..”, the Minister added.
Besides, he said, the fraudulent transactions also took place in the accounts of broker firms like BG Financial Services, G 2S Management consultants and Normans Martin Broker .
The fraud came to light after the bank look into a query from a customer at Citibank’s Nehru Place branch about its scheme offering high returns.
After discovering the fraud, the Citibank on December 5, 2010, filed a complaint with the Gurgaon police which is investigating the case.