Sebi questions Puri, Gupta in Citi fraud case

The Securities and Exchange Board of India (Sebi) today questioned Citibank's Relationship Manager Shivraj Puri and Hero Group employee Sanjay Gupta in connection with the Rs 300-crore bank fraud case.

This is for the second time in a week that the two-member team from the investigation department of the market regulator questioned people involved in the bank fraud case.

Sebi officials, according to sources, also briefed Gurgaon Police Commissioner S S Deswal and his team, which is looking into the banking fraud.

Puri, the mastermind behind the Rs 300-crore Citibank fraud, used to collect fund from HNIs and corporates by showing a forged notification of Sebi. He lured them into investments promising unusually high returns. He was later arrested by the police.

Gupta, Associate Vice President (Accounts) of one of the Hero Group entities -- Hero Corporate Services, too was arrested by the local police for his involvement in the bank fraud case.

He allegedly invested Rs 250 crore of funds belonging to promoters of Hero Group and has reportedly received a commission of Rs 20 crore from Puri.

Sebi officials, according to sources, also met the staff of the brokerage firms -- Religare and Bonanza -- in connection with the banking fraud.

Puri used to invest directed funds into stock markets through these brokerage firms.

Religare Securities had said that Puri was its client since December 2009.

Sebi, sources said, was trying to find out whether people connected with the banking fraud case were involved in share price rigging or manipulation of stock market.