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Unearthing the Citi scam

india Updated: Jan 08, 2011 23:52 IST
Faizan Haider

It was the downfall in the share market in the third week of November last year which also led to the downfall of Shivraj Puri, the Citibank official who hit headlines for swindling off crores from high net worth individuals.

According to police sources, Puri had invested nearly Rs 300 crore in the share market and used to return the profits to investors he gained from the market.

It was after November 15 when he started facing losses and failed to provide monthly interest to companies, making them suspicious.

Soon, customers started pouring in to the Citibank branch in DLF Phase-2 with queries and the fraud was unearthed.

“Puri had deposited Rs 300 crore as security amount in the stock market and got shares worth Rs 1,200 crore. Till November 15, he made huge gains but the market crash hit him hard. His security amount was reduced to Rs 240 crore and he was unable to return money to his investors,” said a senior police officer, who asked not to be named.

“A complainant informed senior bank officials that Puri was not returning his money as promised in the scheme. Bank officials, however, denied running any such scheme and ordered an internal investigation,” the officer further said.

Also, details from Bombay Stock Exchange and National Stock Exchange helped the police trace the trail of money. It was also found that the money was transferred to brokerage companies Religare and Bonanza to be invested in Nifty.

“The problem is to bring back the money which is now in the market. Till now, we wanted to probe the scam and other transaction details, including dates when the investments were made,” the officer further said.

Shivraj Puri, a relationship manager with Citibank, has been accused of luring bank customers to invest money in a fake scheme.

He was arrested on December 30 and has been in police custody since then.

He was produced before the court last Wednesday which had extended his remand for six days.