Citi starts refunding money in Gurgaon fraud

Refunding only principal, Munjals begin to get back money

Citibank has started refunding money to those who had invested in the fraudulent scheme run by its relationship manager at Gurgaon, Shivraj Puri. Many entities of the Munjal family, victims in this regard, got back their money in recent days. The refund in all such cases has been only of the principal amount invested and follows a legal representation made by the clients.

‘‘Many entities of the family which signed an agreement with the bank have recovered their investment,’’ said a person familiar with the development. Other Munjal entities are in the process of being paid back, confirmed another member of the family.

A Citibank spokesman said the bank had started a fair compensation process but did not respond to specific questions in the email. Sunil Kant Munjal, the Munjal family spokesman, did not respond to SMS, calls or email.

In the legal agreement Citibank is signing with investors for compensation, the bank is returning the principal amount to investors, minus any amount Puri may have paid to them as interest, confirmed officials dealing with the case.

This is based on a legal declaration made by investors, agreeing to continue to cooperate in the case, to let the bank step into their case and agreeing that whatever recovery it makes would accrue to the bank. In cases where customers invested through other’s accounts, their declaration in the legal agreement is being taken as the basis for settlement.

Refunds, however, are pending in cases where executives have been arrested for taking commissions from Puri, said officials dealing with the case. Another high-profile investor, who didn’t want to be identified, said he’s yet to recover his money.

Last week, Citibank had said it was working towards providing “fair compensation” to its affected customers. Puri is accused of luring high net worth individuals to invest in a bogus investment scheme and diverting the money to the stock market. The Gurgaon police are investigating the Rs 400-crore fraud.

His victims include Hero Group promoters (Rs 250 crore) and Helion Advisers’ managing director, Sanjeev Aggarwal (Rs 33 crore).

The global banking major said last week it had been reconciling the amounts involved with the impacted customers and commencing the process of working towards a fair compensation for them.