India cops: Citi execs not targets in probe
A Citibank in New Delhi where four top Citigroup have been named in a fraud investigation. Police in India say that the four are not targets. (Jan. 5, 2010) Credit: AP
NEW DELHI - Four Citigroup executives named in a $66 million fraud investigation, including chief executive Vikram Pandit, are unlikely to be questioned about the alleged swindling of Indian investors because their involvement appears remote, police in India said Wednesday.
Citi India manager Shiv Raj Puri was arrested this past week in a scheme to dupe Indian individuals and businesses into investing with the promise of high returns.
Police in India said up to $66 million may have been stolen in the case, filed after Citi India itself said it discovered suspicious transactions based on allegedly forged documents.
The Manhattan-based executives were named Tuesday in a second police report after a Citi India client accused the bank of failing to protect investors' interests and deposits.
But on Wednesday, Gurgaon Police Commissioner S.S. Deswal said the Manhattan executives, including Pandit, would not likely be called for questioning in the case, which instead was focused on several Citi India employees. No charges have been filed yet.
"The possibility of involvement of the global CEO ... looks remote," Deswal told the Press Trust of India.
Citi India also said the complaints against the executives "are completely without basis, and we intend to contest them vigorously."
Gurgaon police opened the second investigation 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 $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 adviser and former vice chairman Bill Rhodes, Citi chief financial officer John C. Gerspach and Citibank N.A.'s chief operations officer Douglas L. 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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