The alleged mastermind of Rs 300 crore (Rs 3 billion) Citibank fraud, Shivraj Puri, invested most of the funds raised from corporate entities and high networth individuals in derivative instruments in stock markets. A major chunk of investment into stock markets was done through derivatives, like Nifty options, while cash market exposure was negligible, sources told PTI.
Nifty options is a derivative contract under which an investor needs to pay only margin money and has no obligation to take delivery of a particular security. The investment in stock markets was routed through two brokerage entities -- Religare Securities and Bonanza.
To ascertain the investment pattern, a two-member Sebi team from the investigation department had come from Mumbai. The team has collected details about the investment pattern, role of brokerage firms and any possible share price manipulation.
The team left for Mumbai on Sunday and may come again for further questioning later, sources said. It would study the data collected and is in regular touch with the police. Market regulator Securities and Exchange Board of India's (Sebi) investigation is also looking into any possible share price manipulation done in this case.
Sources said Puri was well versed with futures and options trading, considered a complex investment instrument.
Meanwhile, in connection with the Citibank fraud case, a Hero Group senior official Sanjay Gupta was arrested today and remanded in five-day police custody for allegedly investing about Rs 250 crore (rs 2.5 billion) belonging to promoters of group companies.
The fraud relates to an estimated Rs 300 crore raised from about two dozen corporate entities, including Hero Group, and HNIs by Puri who promised them unusually high returns.
Puri is accused of showing a forged Sebi document with a claim that they would generate very high return of 18 per cent. Puri was arrested last week and sent to police custody.
