Gurgaon: Police today arrested a senior official of the Hero Group, Sanjay Gupta, in connection with the estimated Rs300 crore Citibank fraud case, reports PTI.
Mr Gupta, who is the associate vice president (accounts) of one of the Hero Group entities-Hero Corporate Services-has been arrested under the section 120B of the Indian Panel Code that deals with criminal conspiracy.
The local police had last week called Mr Gupta for questioning along with Shivraj Puri, the main accused in the fraud discovered at the Citibank's Gurgaon branch.
Gurgaon police commissioner SS Deswal had said that Mr Gupta was called as part of investigations as a major chunk of the money has gone into brokerage firms-Religare and Bonanza-whose officials were also called for questioning.
The fraud, which is estimated to be Rs300 crore, relates to mis-selling of investment products to high networth clients.
Mr Puri, as relationship manager of the bank, used to sell investment products claiming that they would generate very high return of 18%. He was arrested last week and was sent to police custody for a week.
Last week, Brijmohan Lal Munjal-led Hero Group had admitted that its exposure to the fraud was to the tune of Rs28.75 crore.
Although the group has maintained that its flagship firm Hero Honda has no connection with the fraud case, the National Capital-based business house is silent on involvement of other BML Munjal-led group entities-Hero Corporate Services, Rockman Cycles Industries, Hero Mindmine Institute, Easy Bill and Hero Management Service.
Remember Onjus, the forerunner to Pepsico’s Tropicana and Dabur Real? After a history of classic misgovernance, the orange juice in a tetra pak is being relaunched. This time with the Times group as an ally
After its very successful launch about 13 years ago, 'Onjus', the brand that served orange juice in a tetra pak, slowly vanished from shop shelves and from public memory too. Now, a Rs45 crore initial public offer (IPO) is proposed for the brand, which has managed an unsatisfactory grade 2 out of 5 by Fitch Ratings. The poor ratings should ring a warning bell on the quality of the issue. Indeed the Onjus story is an astonishing case of daylight robbery that directly and indirectly involves banks, promoters and now also the Times group.
In May 1997, Onjus, was launched by Enkay Texofood Ltd, as an offshoot of its main business of exporting pulp to Europe and North America which was started in 1990. Onjus marketed 100% orange juice and on this strength gained a 19% share in the niche market of fruit juices available in a tetra pak, virtually creating a new product category.
But the company was run poorly and soon fell foul of the law. In 1999, the director-general of investigation and registration lodged a complaint with the Monopolies and Restrictive Trade Practices Commission, against Onjus being sold as a 'natural' fruit juice. As a result, Onjus was withdrawn for sometime, leaving the field open for 'Real' and 'Tropicana'.
Then there was a second blow. The owners, Enkay Texofoods, were troubled by the poor performance of their textiles business. So, they channelled profits from Onjus into the textiles activity, but it did not help the business. Instead, Onjus went down, and both the divisions were shut in 2001. Enkay became a sick company.
Onjus was almost unheard of for some time, till 2004, when a company called Tunip Agro Limited (TAL) (in)famously declared themselves as the original owners of the brand. This came as a surprise to market watchers and shocked stakeholders. Tulsidas Goyal, managing director of Enkay, declared that no action could be taken against Tunip, because Enkay Texofood had conveniently not registered Onjus as its brand. This turned out to be a sham of a dispute, when it was learned that Tunip is run by Siddhant Goyal, the son of Tulsidas Goyal. The official promoters of Tunip are Siddhant Goyal and Neeta Goyal.
So Onjus, which once resisted being sold to Parle and Dabur who had made lucrative offers, was 'launched' again by Tunip Agro, while the stakeholders were left gaping. So, when the IPO was announced, there was a feeling among Enkay shareholders that they were being cheated. With the money collected through the IPO, the owners plan to set up manufacturing units in Sri Lanka and revamp its units in India.
The stakeholders continue to be baffled about the way Tunip slyly acquired Onjus, even though it is an intangible asset that was built with the money of Enkay shareholders and the company owed money to banks.
Amazingly, Tunip is backed by Bennett Coleman & Co Limited (BCCL), publishers of The Times of India. Two group firms of BCCL acquired 11.68% for around Rs6.67 crore (about $1.4 million) in May 2010, according to VC Circle, valuing the firm at Rs57 crore. "Unlike most of its deals routed through Times Private Treaties or Brand Equity Treaties Ltd, in this case, BCCL has also struck part of the deal through another of its investment arms Dharmayug Investments Ltd," says a VC Circle report.
But it is very unlikely that Onjus will be a runaway hit once again. Jagdeep Kapoor, chairman and managing director of Samsika Marketing Consultants, who charted the successful launch in 1997, is sceptical about the second innings. "It was a brand very close to my heart, but ultimately, we had to part ways. It was a very strong brand. But now it has to work very hard to regain its popularity."
The fact is that while it was gross injustice that Onjus was siphoned out of Enkay, it has not been easy for the next generation of Goyals to build the brand. Tunip Agro is only a six-year old company with revenues of Rs39.90 crore and a net profit of just Rs 0.91 crore for the year ended March 2010 and it has a long way to go before it can claim some success.