Citigroup probing Rs350-crore fraud at Gurgaon branch in India's `Year of Sham'

Citigroup today said the bank is investigating a Rs350-crore fraud at its Gurgaon branch and has filed charges against one of its employees.

Shivraj Puri, an employee at the Gurgaon branch of Citibank, is alleged to have siphoned off around Rs350 crore from various high net worth (HNI) clients.

The Reserve Bank of India and market regulator Securities and Exchange Board of India (SEBI) and the police are jointly investigating the fraud.

Puri is said to have used a forged SEBI letter to attract high net worth clients to invest in unauthorised schemes. The monies thus received have been transferred with the promise of getting extra benefits and higher returns.

The clients' monies were then transferred into three Citibank accounts under the name of Sheela Premnath, Diksha Puri and Premnath. The money was then transferred again to a few Delhi-based stock brokers who in turn have allegedly invested the monies in the stock markets.

Citi, however, said the funds relate to some unauthorised investment schemes and are limited to a few accounts. Citi said the issue does not impact any of its other accounts or transactions or other customers of the bank.

Shivraj Puri, the mastermind behind the fraud, whose links have been identified by the agencies,  is currently absconding.