The investors said that last year, before the global financial crisis emerged, they were promised by the adviser, Ramesh Sadhwani, a return of between 7 to 18 percent a year on their investments. But Sadhwani was fired by Citi early this year after an internal investigation, and the investors have been asking the private bankers to refund their investments with the promised returns.

The investors said that after meetings with Citi, the bank had promised to return 10 to 30 percent of their capital.

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A Citi spokesman said yesterday: "This was an isolated incident. The financial adviser was suspended when this issue came to light. We conducted an investigation, submitted the matter to an independent third party review and reported the incident to the relevant authorities. The employee no longer works for Citi. This matter is currently under investigation and it would be inappropriate to comment further."

It is understood that the Hong Kong Monetary Authority and the Securities and Futures Commission are investigating.

A spokesman for the SFC said it could not comment.

One of the investors, Shankarlal Sureka, said that in April last year he invested US$833,209 on behalf of his son with Sadhwani, who "guaranteed a return of 13 percent per annum" for one year.

But in late September, Sureka said he was told by Citi that "they are not liable and they will not pay."

Sureka said he was surprised that the bank was not honoring a document signed and dated by Sadhwani on the bank's letterhead.

Sureka said that Sadhwani had told him "this is a special product and this you do not have to disclose to anybody. They do not give to all the customers."

Sadhwani, who has left Hong Kong, is now in India working at a brokerage firm.

It is understood the financial adviser was terminated for breach of employees' code of conduct.

Sureka also complained to the US Securities and Exchange Commission. An SEC official said: "We take investor complaints very seriously and try, whenever possible, to provide some form of assistance."

A tutor, Urvashi Gidwani, invested US$296,270 with Sadhwani, who promised in April last year a minimum rate of return of 18 percent. Gidwani said the bank's settlement offer was too low and was not acceptable.

"I sincerely hope that Citigroup would have given me a fair settlement given the length of time they had taken for the investigation," said Gidwani.

Another investor said he was negotiating with bank over the settlement offer and would not comment.