Citibank US Top Brass at HQ named in Indian FIR by Top Investor Sanjay Aggarwal of Helion Funds in the Gurgaon Branch Wealth Management Fraud…stirs angry memories of this Bank

This Wealth Managment Fraud of over Rs 300 Crs, claimed to be the ingenuity of a relationship manager of Citibank at it’s Gurgaon Branch in Delhi is now being widened in investigation scope to include even the role of the World Head, Mr Vikram Pandit and Chairman,Mr William Rhodes and ten other Bank Officers in New York.

They have been named by Individual Investor Mr Sanjay Aggarwal in a FIR filed at the Gurgaon Police Station.Mr Aggarwal is the co founder of India’s leading BPO Daksh and currently is the MD of Helion Venture Partners….one can meet him in a fireside chat at the Angel Investors Forum to be held on January 20,2011 in New Delhi    

Mr Aggarwal has lost Rs 32.43 crs in the Fraud committed in the Wealth Managment Division of Citibank in their Gurgaon Branch…..his FIR includes the names of Citibank’s top brass…his contention is that the fraud could not have been committed without the knowledge of the Bank and it’s top officers…bank has to take responsibility for the fradulent actions of it’s officers involved in this fraud as a bank is expected to have checks and balances in place to prevent such frauds occuring

Mr Aggarwal stirs angry memories that I harboured against ‘Citibank’…On November 23, 2008 I had even blogged on  several incidents and experiences with the bank that that created these sour memories over the years

‘citi never sleeps’…well ! Citigroup should !

Sunday, November 23rd, 2008

Citibank must have spotted that something was amiss when some Investors or Potential Investors approached it on the Bank offering Investment Proposals with a higher rate of Return….they rubbish the FIR including the names of the Banks Top Brass as being baseless…the criminal charges are strong against the bank and it’s top honchos…cheating…criminal breach of trust….misappropriation of funds 

My Point is simply this….Citibank is responsible……if checks and balances and internal control systems and processes were in place then this fradulent situation would not have been created….that it has, points to either of two situations…both in which the bank has to be responsible

• strong checks and balances were not in place…in which case Citibank is responsible
• checks and balances were in place but there has been collusion within the bank itself to perpetrate this fraud….difficult to believe that one guy could have done it all !…..if this is true then there are no checks and balances in place !……in any case Citibank is responsible for employees actions while being employees and representing the bank…this is the point under debate…..ofcourse the bank  will take action against these employees….but can it escape responsibility ?

Investors are dealing with the Bank and not just it’s employee and relationship manager,Shivraj Puri who has been accused of masterminding this fraud….of course it is too stretched to say Mr Pandit and Mr Rhodes who reside in USA and preside over the whole Bank were aware of this Operation in question at their Bank’s Gurgaon branch…the question raised by Mr Aggarwal’s accusation in his FIR is one of ultimate responsibility

It’s like saying Chairman,Suresh Kalmadi did not know what his Commonwealth Games Organising Committee was doing…It’s like saying Satyam’s Board of Directors and Top Brass and even auditors were unaware of promoter Ramalingam Raju’s Motives and Gameplan…I daresay it’s like saying even our own PM was unaware of the huge alleged 2G Telecom scam perpetrated by political ally,DMK’s ex Telecom Minister,A Raja….and remember that in the Union Carbide Bhopal Gas Disaster the whole Board of Directors of the Company faced criminal charges,including the US Chairman Anderson…who was ‘escorted’ back to USA under severe US Pressure

What a tussle between substance and form…between realities…moralities…..legalities…and responsibilities ! 

Banks…Monies….Frauds….these seem inevitable….recently CBI arrested several bankers,money brokers and even listed company heads for an unholy nexus of facilitating huge loans and equity placements for kickbacks 

Just a Thought flashed by me now…Wikileaks has threatened to release more hugely damaging documents…some of which relate to a major US bank…it is widely thought this bank is Bank of America…Citibank must be on tenderhooks too !