BUSINESS

Hero Group a victim of Citi fraud

Source:PTI
December 31, 2010 14:33 IST

Hero Group, a leading corporate house, is a victim of the alleged Rs 300 crore (Rs 3 billion) Citibank fraud, says the conglomerate, but did not disclose details of financial involvement.

"Some of the Hero Group entities, along with some others, are victims of the fraud conducted through one of the Citi branches in Gurgaon," Hero Group said in a statement issued late Thursday night.

An enquiry is in progress and the next steps will be decided post enquiry, it added.

However, repeated attempts to obtain details of the group's exposure in the cheating by the Citibank manager did not fructify.

In another statement, the group said neither its flagship firm Hero Honda nor its managing director Pawan Munjal have any involvement in the case.

"This is to put on record that contrary to reports in certain sections of the media, Pawan Munjal does not have anything to do with the ongoing Citibank issue," it added.

It said "neither Brijmohan Lal (chairman of Hero Honda) nor Hero Honda Motors Limited have anything to do with this matter".

The fraud is said to be the handiwork of Shivraj Puri, a relationship manager at the Gurgaon branch of Citibank, who allegedly sold investment products to high networth clients claiming that they would generate very high returns.

Puri was arrested yesterday and was sent to police custody for a week. He had allegedly collected money from High Networth Individuals (HNIs) in a fraudulent manner by promising unusually high returns of 18 per cent.

As per Gurgaon Police Commissioner S S Deswal, of the Rs 300 crore involved in the fraud, Rs 200 crore (Rs 2 billion) belonged to Indian Inc and Rs 100 crore (Rs 1 billion) to individuals.

A police officer directly supervising the issue had said that most of the corporates, which had invested the amount with Puri, belonged to the Hero Group.

Naveen Munjal of Hero Exports alone had given around Rs 50 crore (Rs 500 million) to Puri for further investment, the officer had said.

Brijmohan Lal Munjal and Pawan Munjal pose with a Hero Honda bike.

 

Source: PTI
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