KANPUR Senior officials of a consortium of seven banks have come on the radar of the Central Bureau of Investigation (CBI) in wake of Kanpur-based Rotomac Group defaulting on more than ₹3,700 crore in loans from government banks, said officials aware of the development.
As per the investigation, the consortium of banks was ‘over-accommodating’ and ‘courteous’ to Vikram Kothari and Rahul Kothari, the promoters of Rotomac, and bank officials threw caution to the wind in giving them loans.
In one of its reports, the CBI mentioned that the consortium on December 20, 2010, gave Rotomac Group a letter of credit of ₹150 crore. It emerged that the credit limit of the group was hiked from ₹150 crore to ₹900 crore in just 18 months.
After 10 months on October 21, 2011, the limit was increased to ₹350 crore, which was further hiked to ₹500 crore on June 28, 2012. On this day, the credit limit was increased to ₹900 crore from ₹500 crore in a few hours, said sources.
“Bank officials kept increasing the limit on the basis of a nominal security the group had furnished,” they said, adding that the bank officials did not report to the Reserve Bank of India about the anomalies in the group’s merchant trade.
{{/usCountry}}“Bank officials kept increasing the limit on the basis of a nominal security the group had furnished,” they said, adding that the bank officials did not report to the Reserve Bank of India about the anomalies in the group’s merchant trade.
{{/usCountry}}Moreover, CAs, bank auditors, stock examiners and empanelled valuers also supported the group. Despite payment defaults, banks kept assuring the RBI that the situation was under control, said officials.
On February, 22, 2018, the CBI had arrested Vikram and Rahul, both directors of Rotomac Global Private Limited, for the alleged bank fraud during an investigation of the case after allegations of cheating a consortium of seven banks led by Bank of India.
The CBI had registered a case against Rotomac Global, its three directors and unidentified bank officials under sections 120-B, 420, 467, 468, 471 of the IPC and Section 13(2) read with Section 13(1) (d) of the Prevention of Corruption Act, 1988. It was not clear if the third director, Sadhna Kothari, and wife of Vikram Kothari, had been arrested.
The 14 bank accounts the family and their company operated were sealed along with residential premises, offices and factory.
The Enforcement Directorate also had joined the investigation registering separate cases under sections of Prevention of Money Laundering Act, 2002. Vikram Kothari, however, passed away in 2020, following a brief illness.