New Delhi:
Sanjay Gupta who is the Chief Financial Officer of the Hero Group was arrested in connection with the 300-crore Citibank scam today.
The Hero Group CFO allegedly got kickbacks for investing the company's money through suspended Citibank manager, Shivraj Puri. He was produced in court where he was remanded to five days custody.
A manager at the Gurgaon branch of Citibank, Shivraj Puri, was arrested last week for lying to individual and corporate account holders. Puri allegedly promised them high returns through special schemes, then diverted their money into the stock market through accounts opened in the names of his family and friends.
Up to 20 corporate clients - including Hero - were allegedly affected by the scam. Last week, the Hero Group said in a statement that its exposure was in the range of 30 crores.
"The exposure of the B.M.L Munjal controlled Hero Group in this case is only via its entities, and is Rs. 28.75 crore. These investments were made as part of routine treasury operation in what seemed like perfectly legal investment options. Hero Group is disappointed to learn that it has become a victim of the fraud under question. The Group is taking appropriate action and has also initiated dialogue with relevant authorities and Citibank to recover its dues. This is to further clarify that Hero Honda Motors Ltd, a part of the Group, has no involvement in any of these investments," Hero Group said in a statement.
Gupta was questioned by the Gurgaon police last week along with representatives of Religare and Bonanza - firms which Puri had used to invest the money, clients had given him.
The Reserve Bank of India or RBI has announced that it is conducting its own inquiry into the scam.