Bengaluru: Multinational finance major Goldman Sachs has found a serious case of fraud and misappropriation committed by its employee Ashwani Jhunjhunwala, amounting to Rs 38.8 crore.
Jhunjhunwala was a vice-president of Goldman Sachs’ foreign exchange and equity settlements division.
According to Jhunjhunwala’s alleged confession to the Bengaluru Police, who arrested him Tuesday, he had racked up huge debts playing online poker. He had already defaulted on prior personal loans from banks and was refused any fresh ones.
Jhunjhunwala has been arrested under sections 419 and 420 (cheating) and 408 and 409 (criminal breach of trust). “We have arrested Jhunjhunwala and will shortly produce him in court,” said DCP (Whitefield) M.N. Anucheth.
Asked for comment, Goldman Sachs told ThePrint: “In addition to the immediate dismissal of this employee, we are engaged with the authorities to activate criminal proceedings.”
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How the fraud was detected
The fraud was discovered by Goldman Sachs’ internal mechanism that alerted management of a possible suspicious transaction when Jhunjhunwala diverted money to the Hong Kong account of a company called Synergy Wisdom Ltd.
Upon checking CCTV footage and questioning his teammates Gaurav Mishra, Sujith Appaiah and Abhishek Yadav, it came to light that Jhunjhunwala had accessed his juniors’ accounts from their systems while they were away.
Explaining the modus operandi, DCP Anucheth said Jhunjhunwala had access to another financial manager’s account, so he used it to transfer the money to himself on 4 September.
“The company detected the fraud through its internal mechanism and began questioning him and handed him over to us,” the police officer said.
The police 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.”
Missing accomplice
The Bengaluru Police are on the lookout for a former Goldman Sachs employee called Vedant who had, in the past, misappropriated funds from the company. The two had colluded to carry out the fraud, according to the police.
Jhunjhunwala’s LinkedIn profile states that he has over 14 years of experience in capital market operations and project management on financial consultancy. He is a former employee of Tata Consultancy Services.
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This report has been updated with Goldman Sachs’ response.
The Indian govt through the Enforcement Directorate and other agencies must maintain a strict vigil over the activities of foreign banks in India. It is an open secret that the millions of dollars stashed away in tax havens like Switzerland, Cayman Islands, etc. have been routed to these nations/territories via the big names of international banking. The foreign banks operating in India have been complicit in advising and helping their clients route their legally taxable incomes in India to these tax havens in order to avoid paying what is due of them.
Some banks have been penalized by the RBI for such activities. But increasingly it is getting clearer that there is much more to it than what meets the eye. It is a very well oiled network of banking transactions which results in taxable Indian earnings ending up in bank accounts at Cayman Islands and Switzerland. And some of the most reputed international banks are aiding and abetting this process hile earning billions as profit or their share of the “loot”.
Don’t Goldman Sachs defrauds its clients and the general public all the time? What’s surprising when its own employee returned the favor?
Sources:
Goldman Sachs: A Criminal Enterprise (https://hendersonlefthook.wordpress.com/2014/07/04/goldman-sachs-a-criminal-enterprise/)
Goldman Sachs and the 1MDB Scandal (https://corpgov.law.harvard.edu/2019/05/14/goldman-sachs-and-the-1mdb-scandal/)
If Goldman Sachs can have fraudsters, one can imagine how many more may be in Indian companies. It’s not just employees, even promoters of Indian companies are involved in frauds. Indian economy can’t be built by such companies for whom money is every thing. I say this is the result of Congress ideology where people with moral values are laughed at and termed as low level religious people. There has to be a reason for most Congress leaders being corrupt.