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CBI, ED probe `3700 crore Rotomac scam

Just a few days after the alleged Rs11,400 crore state-run Punjab National Bank (PNB) scam involving fugitive diamantaires Nirav Modi…

CBI, ED probe `3700  crore Rotomac scam

Vikram Kothari

Just a few days after the alleged Rs11,400 crore state-run Punjab National Bank (PNB) scam involving fugitive diamantaires Nirav Modi and Mehul Choksi came to light, another alleged Rs 3,700 crore bank fraud has been uncovered involving Rotomac pen promoter Vikram Kothari and his family and firm.

The CBI and the Enforcement Directorate have registered separate cases against the Kanpur-based industrialist Vikram Kothari and others for allegedly defrauding a consortium of seven public sector banks of about Rs 3,700 crore.

The CBI registered an FIR on Sunday against Rotomac Global Pvt Limited, its directors including Kothari, his wife Sadhana and son Rahul, and unidentified bank officials on a complaint dated 18 February from Bank of Baroda, officials said. The CBI has registered the case under various sections of IPC and Prevention of Corruption Act on allegations that they in “criminal conspiracy with themselves and other unknown bank officials”, cheated Bank of Baroda to the tune of Rs 616.69 crore including interest.

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“The total outstanding amount of the members of consortium of seven banks i.e. Bank of India, Bank of Baroda, Indian Overseas Bank, Union Bank of India, Allahabad Bank, Bank of Maharashtra and Oriental Bank of Commerce has come to Rs 3695 crore, including interest, by siphoning of bank loans disburbsed to the said company,” the CBI said.

This bank loan fraud was earlier estimated to the tune of about Rs 800 crore, but after the CBI started looking into the accused company and promoter’s accounts they were found to have allegedly cheated the banks by siphoning of their bank loans amounting to about Rs 2,919 crore.

The total outstanding amount along with interest and liabilities for Rotomac were thus estimated by the CBI to be Rs 3,695 crore. The CBI has conducted searches and raids at various premises of Kothari and his firm in Kanpur from early Monday. The agency also questioned Kothari and his family members in this regard. It has also sealed a residential apartment and office premises of the accused in Delhi.

Simultaneously, the ED registered a case of money laundering under the Prevention of Money Laundering Act (PMLA) against Kothari and his family members. The ED would investigate if the swindled funds were laundered and whether the proceeds of the crime were subsequently used by the accused to create illegal assets and black money.

CBI officials indicated that Rotomac promoters allegedly siphoned of loans secured from consortium of banks from 2008 onwards. The credit sanctioned to the firm by a bank for a particular export order was diverted to a different offshore company and later the money was remitted back into the Kanpur-based firm without executing an export order. Similarly, money disbursed by the banks for procurement of goods for export was not utilised and no export order was executed ever.

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