Rotomac Pens Rs 37 bn-fraud: CBI questions Vikram Kothari, son in Delhi

Rotomac allegedly took loans from 7 banks - Bank of Baroda, Bank of India, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Allahabad Bank, Oriental Bank of Commerce

The CBI on Wednesday started questioning of Rotomac owner Vikram Kothari and his son, Rahul, at its headquarters in New Delhi in connection with alleged loan default of Rs 36.95 billion (Rs 3,695 crore) towards a consortium of seven nationalised banks, officials said.

Earlier, Kothari was being questioned in Kanpur, where his company and residence is located, they said.

He was called in New Delhi by the agency, which started his questioning at its headquarters, they said, without giving any reasons behind the move.

Kothari, his wife Sadhana, and son Rahul, all directors in Rotomac Global Private Limited, have allegedly diverted the bank loans towards purposes other than they were meant for, officials said.

One of the consortium members, Bank of Baroda had approached the CBI requesting an FIR against Kothari as the bank apparently feared he might leave the country, they said.

The CBI registered a case on February 18 after receiving the complaint. Initially, the alleged scam was estimated to be of Rs 800 crore but after the CBI started probe into the accounts of the Rotomac Global Private Limited, it was found that the company had allegedly taken loans from Bank of India, Bank of Maharashtra, Indian Overseas Bank, Union Bank of India, Allahabad Bank and Oriental Bank of Commerce.

The CBI alleged that the accused had cheated a consortium of seven banks by siphoning off bank loans to the tune Rs 29.19 billion (Rs 2,919 crore). The total outstanding amount along with interest and liabilities for the company were pegged at Rs 36.95 billion (Rs 3,695 crore), the probe agency alleged.

Yesterday, the Enforcement Directorate (ED) had notified all the land, sea and airports in the country to prevent the exit of the promoter of Rotomac pens, Vikram Kothari, and his family members from India, in connection with its money laundering probe.

The agency also conducted searches at multiple locations in Uttar Pradesh, including in Unnao and Kanpur, to gather evidence in the case.

The ED had slapped criminal charges under the Prevention of Money Laundering Act (PMLA) against the company and its promoters on February 18, based on a CBI FIR filed on the same day.

Meanwhile, the Income Tax department had also attached 14 bank accounts of the pen manufacturer as part of its tax evasion probe against the company yesterday.

This is the second major bank fraud to surface in the recent past after the sensational Rs 114 billion (Rs 11,400 crore) Punjab National Bank (PNB) fraud, allegedly committed by diamond merchant Nirav Modi and his uncle Mehul Choksi, who is a promoter of the Gitanjali Group of companies.

Both Modi and Choksi left the country last month.