The Mumbai police has registered a first information report (FIR) against HSBC India, its former chief executive Stuart P Milne, Priya Paul, its relationship manager as well as several top officials of the bank and its subsidiary Canara HSBC OBC Insurance Company for allegedly defrauding a very senior citizen and his family.
The Mumbai police FIR has named Priya Paul, Miss Jhumar, head of premier banking at HSBC's main branch, Vaishali Chauhan, manager of the same branch, Chirag Jain, chief operating officer (COO) of HSBC main branch, Stuart P Milne, (the then CEO) of HSBC India, Ramakrishna S, head for retail banking and wealth development at HSBC, Animesh Raizada, head for wealth management at HSBC and Mayur Patni, head for customer relations at the bank.
According to the Mumbai police FIR, one Priya Paul, who was relationship manager had sold 83-year Rusi Postwala and his family members several insurance policies by redeeming his investments in mutual funds, under the pretext of ensuring better return on investment. As a result, Postwala, his wife Rusi and daughter Khushnuma Behram suffered a loss of Rs1.48 crore, as per the FIR.
Initially, the Mumbai Police had closed the file stating that there was no need to investigate the matter since no offence was made out. It was only after Postwala and his daughter Behram approached the State Police Complaints Authority, which observed and remarked that cognizable offences are made out in this case, that the FIR was registered by the Mumbai police, after a gap of two years.
Behram has stated in her complaint, "...the accused officials of HSBC Bank and Canara HSBC OBC Insurance Co, with an intention to obtain handsome commission had committed offences of forgery, fraud, cheating, criminal breach of trust by forging signature of my daughter in the proposal form and filing wrong information of myself and my father and misappropriation of funds of my father and myself to the tune of Rs 1,47,57,837 (around Rs 1.48 crore)..."
Behram and her father Postwala had tried take up this issue with senior officials of HSBC Bank and Canara HSBC OBC Insurance Company as well as the Reserve Bank of India (RBI), the Banking Ombudsman, and the Insurance Regulatory Development Authority of India (IRDA), but they did not receive any response.
However, they succeeded in getting the FIR filed due after receiving help from a former police officer Mahesh Athavale and lawyers who had worked in the economic offences wing (EOW) of the Mumbai police, and investigated several financial crimes.
Incidentally, this is not the first time that officials of HSBC Bank have cheated its own customers. In March 2014, HSBC had settled and closed its five year-old dispute with singer-actress Suchitra Krishnamoorthi under pressure from regulators.
In November 2013, the Securities & Exchange Board of India (SEBI) had sent a strongly-worded notice to HSBC asking it to explain why its acts in handling the portfolio of Suchitra Krishnamoorthi were not in violation of its regulations governing fraudulent and unfair trade practices as well as a violation of the code of conduct governing mutual fund distributors.