MONEY LAUNDERING

CBI arrests Vikram Kothari, son in Rs 3,695 crore Rotomac bank fraud case

The agency has filed a case against the company and its directors

Rotomac Global Private Limited MD Vikram Kothari's bungalow in Kanpur | PTI Rotomac Global Private Limited MD Vikram Kothari's bungalow in Kanpur | PTI

The CBI on Thursday arrested Vikram Kothari and his son Rahul Kothari, both directors of M/s. Rotomac Global Pvt Ltd in Kanpur, in connection to its ongoing investigation of a case on allegations of cheating a consortium of seven banks by siphoning off loans to the tune of Rs 2,919 crore (principal amount). This did not include the interest liabilities of these loans, according to the CBI. The banks involved are the Bank of Baroda, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Allahabad Bank and Oriental Bank of Commerce. 

The CBI had registered a case against Rotomac Global Pvt Ltd, its directors—Vikram Kothari,  his wife Sadhana Kothari and son Rahul Kothari—and unknown bank officials on a complaint from Bank of Baroda earlier this week. While the CBI registered a case against the Kanpur based businessman on Sunday evening, the Enforcement Directorate on Monday registered a case under Prevention of Money Laundering Act against him. 

A CBI spokesperson said that the total outstanding amount, along with interest liabilities for Rotomac is Rs. 3,695 crore.

Apart from conducting searches at three places in Kanpur and questioning all the three accused directors last week, the CBI had also sealed a residential premises and an office of the Rotomac directors in New Delhi. 

According to the CBI officials, the company allegedly did not produce full set of documents for all the trades carried out under mercantile trade segment which raises suspicion about the genuineness of these transactions. It is alleged that the company used to submit photocopy of bills and other papers of merchant transactions to the bank on the pretext that original papers were directly sent to the importer.

''All these papers were originated at overseas centres. The company misutilised the facility and submitted the documents related to mercantile trade on the basis of which chain of the transaction could not be established. Genuineness of these bills submitted by the client to the branch is doubtful. In most of the cases insurance of goods is not submitted,'' says the CBI in its FIR. 

The CBI also found that the company's business operations were being carried out through fictitious and front companies. The company is alleged to have submitted false and forged documents and dishonestly induced the bank to advance money thereby cheating the banks and fraudulently siphoning off funds causing financial loss to the bank and wrongful gain to itself to the tune of Rs 456 crore which is still outstanding and to be recovered from the company and the accused persons. The CBI also alleged that the accused have worked for interest rate differential in local and foreign currency in guise of merchant trade without having a genuine business transactions and defaulted in meeting its payments obligation to the bank by diverting and siphoning off the funds.