Hero Group executive arrested in Citi fraud

Police say Sanjay Gupta helped invest Hero funds in scam

In a dramatic turn to the multi-crore Citibank financial fraud, the Gurgaon police today arrested Sanjay Gupta, associate vice-president of Hero Corporate Services, on charges of forging documents and criminal conspiracy.

Three days after Gupta was first questioned by the Gurgaon police, he was arrested on Monday morning after the police managed to obtain evidence that Gupta had fraudulently invested around Rs250 crore in the Rs300-crore scam.

Gupta’s name had first cropped up during the interrogation of prime accused Shivraj Puri, a relationship manager in Citibank. Gupta had access to the investments details of several high net-worth clients belonging to the Hero Group.

Senior officials of the Gurgaon police said that the role of Gupta further became clear after officials from markets regulator Securities & Exchange Board of India (Sebi) checked all the available documents in detail and helped question Puri again.

Officials said that more arrests could take place in the coming days once the police complete the interrogation of Gupta. Soon after his arrest, Gupta was sent to police remand for five days.

“We were suspicious about his role after the police had questioned him initially. We believe that he was not only aware that the Sebi document shown to dupe investors was forged, but that he had also invested around Rs250 crore from different Hero Group companies and their promoters,” said S S Deswal, the Gurgaon police commissioner.

“He had formed two finance companies, BG Finance and G2S, and also extracted a commission of nearly Rs20 crore from Shivraj Puri,” Deswal added.

According to his social network page, Gupta is a chartered accountant and an MBA from Institute of Management Technology, Ghaziabad. He has been with Hero Corporate Services since 2008.

Meanwhile, Puri is believed to have invested most of the funds raised from corporate entities and high net-worth individuals in derivative instruments like Nifty options, sources told PTI. It is understood that the investment was routed through brokerage firms Religare Securities and Bonanza.

A two-member Sebi team from the investigation department in Mumbai arrived in Gurgaon to collect details about the investment pattern, role of the brokerage firms and any possible share price manipulation. The team went back to Mumbai yesterday to study the data collected.

The team is touch with the police and could return to Gurgaon to question Puri further.