Top Hero Group official held in Citibank fraud (Fourth Lead)

GURGAON - Sanjay Gupta, a top official of the Hero Group, was Monday arrested for his alleged connivance in defrauding Citibank customers, including his own company, of an estimated Rs.300 crore, police said. A local court later sent him to five days’ police remand.

According to police, Gupta, the chief financial officer of Hero Corporate Service Ltd (HCSL), used to lure corporates into depositing money in fraud mastermind Shivraj Puri’s scheme.

Gupta was instrumental in HCSL investing Rs.250 crore in Puri’s fraud scheme. He was paid Rs.20 crore as commission by Puri, Citibank’s relationship manager, according to the police statement.

HCSL manages the Services Businesses of the Hero Group which include Real estate, Financial services, Information Technology-enabled services, Consulting & Advisory, Integrated Learning & Education businesses.

Gupta knew that Puri was investing the money in the market without the knowledge of the account holders.

“We have found Gupta’s involvement in the fraud as he is the one who lured corporates to deposit money in Puri’s scheme,” said a senior police officer.

Puri had surrendered last Thursday and was sent to seven-day police remand.

According to police, firms belonging to the Delhi-based Hero Group invested Rs.200 crore in Puri’s account and Rs.100 crore was invested by individuals. Puri, in turn, invested the money in five major brokerages, including Religare, Okaya and Bonanza.

Puri allegedly cheated investors by asking them to deposit money into accounts managed by him, promising to invest it in schemes that offer very high interest within a short span of time.

Some 40 teams have also been constituted to track some 81 accounts into which the 32-year-old accused is alleged to have deposited the money.

The Hero Group Friday said that its exposure to the scam was just Rs.28.75 crore and that investments were made by its entities.