Citibank India Fraud Case Names Bank's Top Brass

Vanessa Doctor

6 January 2011

The ongoing Rs300 crore fraud case against Citibank took another turn recently with the inclusion of the bank's top executives in a legal complaint, according to media reports.

In the first information report by the Guragon authorities based on the complaint by Sanjeev Aggarwal, managing director of the investment company Helion Advisors, Citibank and its leaders were accused of criminal breach of trust, criminal conspiracy, cheating, and falsification of accounts, leading to the misappropriation of around Rs32.43 crore of client funds. The names listed on the FIR included Citibank global chief executive Vikram Pandit and India CEO Pramit Jhaveri.

The inclusion of the bank's top brass follows the late December 2011 arrest of former Citibank manager Shivraj Puri for fraud. Reports say that Puri had encouraged clients to enter high return schemes and then deposited their money to personal accounts before diverting them to the stockmarket. Sanjay Gupta, Hero Group assistant vice president and one of the scheme's victims, was also recently arrested for accepting commissions reaching Rs20 crore from Puri.

In the police interrogation, Puri reportedly said that Citibank's top executives were aware of how his scam operated. Aside from Pandit and Jhaveri, senior officers named in the first information report were William Rhodes, Citibank chairman, John Gerspach, chief financial officer, and Douglas Peterson, chief operating officer for North America, among several others.

Citibank India has contested the allegations.

"As this individual well knows, Citi India found and reported the matter to regulators and law enforcement agencies. His claims against senior executives are without basis and we intent to contest them vigorously. It was on Citi India’s complaint that the Gurgaon police filed the first information report and began investigations. Citi will continue to cooperate with authorities on this investigation," the bank said in a statement.

The case is registered under Sections 409, 477A, 420 and 120B of the Indian Penal Code.