Mumbai/Gurgaon, January 06: Citibank manager Shivraj Puri, accused of masterminding a Rs.300 crore fraud, was handed a further police remand of six days from Thursday as the markets watchdog started to examine the role of some brokerages in what is being called the biggest banking scam in India.
“Puri was produced in court and he has been remanded to a further six-day police custody,” Puri’s lawyer Sartaj Baswana said.
An official said police took Puri’s custody to trace an iPad that contains important information. Also, experts with knowledge of stock exchange functioning would question him during the remand period.
A team from the Securities and Exchange Board of India has questioned key officials from Citibank to unearth possible flouting of regulatory norms. Also on the scanner are some brokerage firms which were used by Puri to tap into the stock markets.
According to a SEBI official, the regulator will probe whether the brokerage firms had collected documents which gave proof of Puri’s income — a mandatory requirement for trading in capital markets.
The stock broking firms have been also asked to submit the documents, given as income-proof by Puri, the official added.
Puri allegedly managed to con companies and high net worth individuals after forging a Securities and Exchange Board of India (SEBI) document that purportedly backed his claims about schemes offering high returns.
He surrendered to police Jan 30 and was handed a week-long police remand by a special court in Gurgaon the same day.
Working as a relationship manager, Shivraj allegedly cheated investors by asking them to deposit money into accounts managed by him, promising to invest it in schemes that offer very high interest within a short span of time.
He will be again produced before the court Jan 12.
Among victims of the scam were corporates like the Hero Group, which found that three employees including the chief financial officer of Hero Corporate Services, Sanjay Gupta colluded with Puri to pull off the fraud.
Another high-profile victim is Sanjay Aggrawal, managing director of Helion Ventures, who claims to have lost Rs.33 crore.
Aggrawal, who co-founded business process outsourcing firm Daksh that was later acquired by IBM, has filed a cheating complaint against Citibank and 11 others, including its chief executive Vikram Pandit.
–Agencies