Citi fraud: Puri sent to 14 days'' judicial custody

Gurgaon, Jan 14 (PTI) Shivraj Puri, the main accused inthe estimated Rs 400 crore fraud at Citibank''s Gurgaon branch,was remanded in 14 days'' judicial custody by a local courttoday.

Chief Judicial Magistrate D N Bhardwaj ordered Puri to betaken into judicial remand for 14 days till January 28 at ahearing today. Puri has been in police custody for the past 14days in connection with the fraud.

Puri, who was formerly a Relationship Manager atCitibank''s Gurgaon branch, was initially taken into 7 days''police custody on December 30, 2010, after the Rs 400 crorescam was detected. Later, police remand of Puri was extendedfor six days on January 6 and then, subsequently, for two dayson January 12.

He is accused of luring high net-worth individuals toinvest in a bogus investment scheme on the pretext of highreturns, while diverting the funds to the stock market.

Meanwhile, the police investigation into the fraud hasnow been expanded to take into account the charges made in afirst information report filed by high net-worth individualSanjeev Aggarwal, with the initial probe into the scam done onthe basis of an FIR lodged by Citibank NA, Gurgaon PoliceCommissioner S S Deswal said.

This could lead to another production warrant beingserved on Puri by the police in the next few days. "In thisFIR as well, Puri seems to be main accused, so we may seek hisproduction warrant in the next few days," Deswal said.

Puri invested most of the ill-gotten funds in Niftyoptions, a derivative product with the NSE benchmark indexNifty as the underlying asset, where the investor has noobligation to take delivery and needs to pay only marginmoney. In these derivatives instruments, investors bet on theupward or downward movement of the Nifty and returns depend onthe accuracy of such bets.

Victims of the Citibank fraud include the promoters ofHero Group (Rs 250 crore) and Helion Advisors ManagingDirector Sanjeev Aggarwal (Rs 33 crore).

Other entities whose funds were allegedly diverted byPuri to the stock market include OKS Span Tech (Rs 2 crore),Satyam Auto (Rs 25 crore), Mayar Infratech (Rs 24 crore),Spaid (Rs 62 crore), Karopat Pad (Rs 8 crore), Aero Infratec(Rs 25 crore) and Munab Braej (Rs 71 crore).

Puri is accused of luring about 40 high net-worthindividuals and corporate entities to invest in the ''ponzi''scheme on the false promise of sky-high returns. A seniorofficial of Hero Corporate Services, Sanjay Gupta, whoallegedly conspired with Puri to arrange for his company''sfunds to be "invested" in the scheme, is also in policecustody. .