Citi Fraud: Gurgaon Police Not to Grill Top Honchos

Citi Fraud: Gurgaon Police Not to Grill Top Honchos
Police today 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.

Gurgaon Police Commissioner S S Deswal ruled out questioning of top Citibank executives including Pandit for now on the ground that their involvement in the 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.

Aggarwal told a press conference here that the bank had offered him a "settlement" a few days ago on his loss of Rs 33 crore but they suddenly turned quiet on the offer.

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, which reportedly had an exposure of Rs 250 crore in the banking fraud, sent on leave two employees, Ganpat Singh and Gaurav Jain, 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.
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