Four Citigroup Inc executives, including CEO Vikram Pandit, are under investigation in India after one of the financial company’s Indian managers was arrested for allegedly swindling wealthy investors.
Police in the New Delhi suburb of Gurgaon opened the investigation naming the New York-based executives after a Citi India client accused the bank of failing to protect investors’ interests and deposits.
Last week, police arrested Citi India manager Shiv Raj Puri for allegedly duping individuals and businesses into investing in a scheme promising high returns.
No charges have been filed.
“This is just the investigation level,” Gurgaon police subinspector Babbu Lal said yesterday.
Police said up to US$66 million may have been stolen in the case, filed after Citi India said it discovered suspicious transactions based on allegedly forged documents.
Citi India said, however, that the complaints filed on Tuesday against the executives “are completely without basis and we intend to contest them vigorously.”
Gurgaon police opened the second investigation naming the executives after Sanjeev Aggarwal, the head of private equity firm Helion Advisers, accused the bank of criminal breach of trust.
Aggarwal said the bank cost him about US$6.9 million by buying securities with his money without putting them in his name and that for 18 months he received false portfolio statements from Puri’s official e-mail account.
“I am devastated at the loss of my savings,” Aggarwal said in a statement to the Press Trust of India.
In addition to Pandit, Aggarwal’s complaint names Citi’s senior advisor and former vice chairman Bill Rhodes, Citi chief financial officer John Gerspach and Citibank N.A.’s chief operating officer Douglas Peterson, along with Puri and other employees based in India.
Puri, who turned himself in to police last week, has denied the allegations.
Police also this week arrested a top employee of India’s Hero Group, which holds 26 percent of motorcycle manufacturer Hero Honda Motors Inc, for allegedly investing Hero funds in the fraudulent scheme in exchange for kickbacks. Hero said it hoped to recover the funds from Citi India.
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