Rotomac’s Vikram Kothari a ‘flamboyant’ businessman, loves star-studded parties
People who knew Vikram Kothari say he uses his flamboyance as a way to maintain his credibility. The ‘risk-taker’ is being investigated for defaulting on a Rs 2,919 crore loan.india Updated: Feb 20, 2018 12:23 IST
Associates and friends describe Rotomac Pens promoter Vikram Kothari, accused of allegedly defaulting on repayment of loans of Rs 2,919 crore from seven public sector banks, as “flamboyant”.
And as his troubles increase over the years, they say, so did his flamboyance.
“He is known for his love for cars and star-studded parties. Even in the face of adversities, he didn’t lose his flamboyance. While battling the odds in the last one year, he threw more parties than he did in the past,” a friend who has known Kotahri for 30 years said on condition of anonymity.
“He uses his flamboyance to maintain his credibility before his powerful friends.This was Kothari’s way of dealing with the crisis. He sent across the message – ‘see I am in control’,” this person added .
Cars were a weakness of Kothari’s, others said.
“He would own a popular brand or model before anyone else could lay hands on it,” they said.
Most of his associates and friends describe him as a “risk- taker”.
That may have proved his undoing.
“He was a part of a group of 4-5 people who was heavily into dollar trading. It was kind of ‘satta’ (gambling); he was playing and kept losing,” a second friend of Kotahri said on condition of anonymity.
“At one point, his group lost Rs 1,100 crore in dollar trade of which Rs 400 crore belonged to Kothari. This is how and when his empire began disintegrating,” he added.
Vikram’s father Mansukhlal Madhavlal Kothari in August 1973 launched Pan Parag, which became a private limited company in 1987.
According to people close to the family, when Vikram Kothari and his brother Deepak Kothari decided to divide the business during the lifetime of their father in 2000, the former allowed his brother keep the flagship brand Pan Parag and Yes mineral water.
Kothari sold his stakes in those businesses and chose Rotomac Pens, then a small company, but one he was betting would take the challenge to the then market leader Reynolds. The split between the brothers was unusually peaceful.
Mansukhlal Kothari passed away in 2015 at the age of 90.
Apart from pens, Kothari diversified into the greeting card business to take on Archies by roping in Bollywood actors Salman Khan and Raveena Tandon as brand ambassadors of his company.
His business acumen earned him a place on the Air India board and a national award for best exporter from the then prime minister Atal Bihari Vajpayee.
Kothari also invested in the first mall of Uttar Pradesh, Rave-3. He has other interests in real estate as well, his associates said.
Kothari was going strong till he used the loans he borrowed from banks to play the market – he offshore trading, and crude oil and foreign exchange trading. His associates said he wanted to raise more money to invest in his business.
Some of the trades went bad.
“He began defaulting on repayment of loans, sold off his share in the city’s biggest and costliest housing project – the Emerald city in Laxman Bagh – to raise funds,” said a chartered accountant familiar with the developments.
The slide didn’t stop there.
“He was no longer in control as banks started taking over his properties to recover loans. He moved to debt recovery tribunal and lost the case. He secured a stay order from the National Company Law Tribunal (NCLT) against the auction of some of his properties. He went to NCLT declaring himself a defaulter and wanted his properties to be liquidated rather than be auctioned,” people familiar with the matter said
Before the Central Bureau of Investigation raided his palatial bungalow ‘Santushti’ at 4am on Monday, Kothari dispelled reports that he had fled the country and said he was very much in Kanpur.
He also showed up on Sunday at a high-profile wedding that was attended by top BJP leaders.
“I have taken loans from banks. I am working on a settlement. My case is pending in NCLT and I have held three meetings with the banks,” Kothari said on Sunday.