New Delhi: Rotomac Global, situated in Kanpur, and its directors have been charged by the CBI with fraud in the Indian Overseas Bank for a total of Rs 750.54 crore, according to officials.
The company, which was in the writing instrument sector, owes a consortium of seven banks, led by Bank of India, a total of Rs 2,919 crore. Indian Overseas Bank has a 23% exposure to this debt.
The company and its directors, Sadhna Kothari and Rahul Kothari, have been charged by the agency under many provisions of the Prevention of Corruption Act as well as IPC sections related to criminal conspiracy (120-B) and cheating (420). On the basis of accusations from consortium members, the CBI and the Enforcement Directorate are already conducting numerous investigations against the company.
The Indian Overseas Bank said in their complaint to the CBI, which is now a part of the FIR, that the business was granted a non-fund-based limit of Rs 500 crore on June 28, 2012. After a payment default, the account was classified as a non-performing asset on June 30, 2016, with an outstanding balance of Rs 750.54 crore.
In order to satisfy the company’s foreign trade needs, the bank allegedly issued 11 Letters of Credit (LC), but all of them descended, totaling Rs. 743.63 crore, leaving the bank with no security.
A comprehensive set of documentation for the trade that the company conducted was not produced, and all LCs were issued in favour of two parties — Fareast Distributors and Logistic P Ltd and RBA Venture Ltd.
The bank asserted that the commerce vessel and voyages claimed in the bills of lading are not real because there are no supporting documentation. The bank’s forensic audit allegedly revealed account book manipulation and failure to disclose liabilities resulting from LCs.
The audit also uncovered errors in the relevant voyages, bills of lading, and sale contracts. It said that four parties belonging to the same owner and group received 92% of all sales, totaling Rs 26,143 crore.