Bengaluru: Bengaluru police on Tuesday arrested a senior executive of multinational financial services company Goldman Sachs on charges of fraud and misappropriation. The executive — a vice-president who was part of the forex and equity settlements part of the company — is being held for cheating and criminal breach of trust, after a police complaint was filed on Sunday.
Ashwani Jhunjhunwala, the vice-president in question, allegedly transferred USD 5.4 million (Rs 38.8 crore) from the company’s account to a private account abroad. He was absconding since Monday but was arrested on Tuesday morning.
The company had filed a complaint that is registered under sections 419 and 420 (that relate to cheating and dishonesty) and 408 and 409 (that relate to criminal breach of trust by an employee).
“He had access to another financial manager’s account. So he used it to transfer the money to himself. It happened within a span of just 10 minutes on September 4. The company has an internal mechanism where this suspect transaction came to light. They found out within two hours and questioned him. He has apparently admitted to the transfer of money in the company, and is being interrogated by the police team right now,” said DCP (Whitefield) MN Anucheth.
Police say the company’s complaint states that Jhunjhunwala had lost money in online gaming recently, besides having taken some personal loans, all of which led to this personal financial crisis. Last month, he had tried to increase the personal loan he had taken from a bank, but his application was rejected as he had defaulted six earlier payments.
The money misappropriated from the company’s account was transferred to the account of a company called Synergy Wisdom Ltd, which has an account in a bank in Hong Kong.
He allegedly misused access to a junior’s office system to do the transfer so that his role wouldn’t be found out. However, the company was able to track his movements based on CCTV footage.
The complaint filed by the company’s legal head states: “Ashwani has cheated the complainant by fraudulently transferring 5.4 million USD — approx INR 38 crore — to a third party bank account for unauthorised purposes and thereby making wrongful gains.”
Goldman Sachs conducted its own internal enquiry, questioning three of its other employees, all of who report to Jhunjhunwala. The trio said that Jhunjhunwala took access of their computer systems on the pretext of reviewing their work, sent them away on errands, while he used their systems to set up a third-party settlement instruction that enabled the money transfer.
One employee, Gaurav Mishra, suspected something amiss and checked the use of his system, and realised that a transaction had taken place that he did not recall doing. The matter was escalated, after which the company was able to match the timing of Jhunjhunwala’s use of the system, with the time-stamp on the computer when the transaction was approved.
On questioning, Jhunjhunwala apparently admitted to having created and authenticated the transaction while sending three employees — Mishra and two others, Sujith Appaiah and Abhishek Yadav — away from their desks separately, while they were logged in. He has also admitted to transferring the money in two tranches.
“He is cooperating with the investigators. We are on the lookout for another person who has done this in the past, an ex-employee of Goldman Sachs, who helped him pull off this fraud,” said Anucheth.
As he had lost nearly Rs 47 lakh in online poker, and had other loans from banks and other individuals, he had got in touch with this former employee through social media. He had known the ex-employee to have perpetrated a fraud against Goldman Sachs in the past. It was this ex-employee who allegedly asked him to misappropriate the company funds, assuring him that he would pay him Rs 3.2 crore if he went ahead with it.
Jhunjhunwala will be produced before a magistrate on Wednesday.
Jhunjhunwala’s description on professional networking site LinkedIn says he is an MBA-graduate specialising in finance and has over 14 years of experience in capital market operations and project management on financial consultancy. He has earlier worked with Tata Consultancy Services.
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