New Delhi: The CBI has charged Kanpur-based Rotomac Global and its directors with alleged fraud in Indian Overseas Bank for Rs 750.54 crore, according to officials.
The company, which was in the writing instruments business, has a total outstanding of Rs 2,919 crore against a consortium of seven banks led by Bank of India, in which Indian Overseas Bank has a 23% stake.
The company and its directors, Sadhna Kothari and Rahul Kothari, have been charged under IPC sections related to criminal conspiracy (120-B) and cheating (420), as well as various provisions of the Prevention of Corruption Act.
On the basis of complaints from consortium members, the company is already under investigation by the CBI and the Enforcement Directorate.
The Indian Overseas Bank alleged in its complaint to the CBI, which is now part of the FIR, that on June 28, 2012, the company was granted a non-fund-based limit of Rs 500 crore.
After a payment default, the account was declared a non-performing asset on June 30, 2016, with an outstanding of Rs 750.54 crore.
The bank claimed it issued 11 Letters of Credit (LC) to meet the company’s foreign trade requirements, all of which were devolved for a total of Rs 743.63 crore, leaving the bank with no security.
The company did not produce the entire set of documents for the trade it conducted, and all LCs were issued in favour of two parties: Farest Distributors and Logistic P Ltd and RBA Venture Ltd.
The bank claimed that the lack of documentation casts doubt on the authenticity of the trade vessel and voyages claimed in the bills of lading.
The bank’s forensic audit revealed alleged account book manipulation and non-disclosure of liabilities arising from LCs.
The audit also discovered irregularities in sale contracts, bills of lading, and associated voyages.