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Although police, who arrested Associate Vice-President of Hero Corporate Services Gupta, sought 10-day custody of the accused, the Chief Judicial Magistrate cum Additional Civil Judge (Senior Division) D N Bhardwaj allowed only five-day police custody.
Police earlier arrested him under the section 120B of the Indian Panel Code that deals with criminal conspiracy.
"Gupta had invested around Rs 250 crore from different Hero Group companies and their promoters. For this, Gupta had formed two finance companies -- BG Finance and G2S, and took commission of Rs 20 crore from Puri for investing the amount," Gurgaon Police Commissioner S S Deswal told reporters here.
The police had last week called Gupta for questioning along with Shivraj Puri, the main accused in the estimated Rs 300 crore fraud discovered at the Citibank`s Gurgaon branch.
"Puri had confessed that Gupta was aware of the forged SEBI letter, on which the amounts were lured from high networth clients," Deswal said.
However, Gupta`s counsel C L Kakkar pleaded before the Court that he is not the accused, but is a victim, and he could turn a witness if required.
Puri, the Relationship Manager employed with Citibank`s Gurgaon branch, used to sell investment products by showing a forged letter of the market regulator SEBI with a claim that they would generate very high return of 18 per cent.
He was arrested last week and sent to police custody for a week.
Deswal had earlier said that a major chunk of the money has gone into brokerage firms -- Religare and Bonanza -- whose officials were also called for questioning.
Last week, Brijmohan Lal Munjal-led Hero Group had admitted that its exposure to the fraud was to the tune of Rs 28.75 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.
