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Banking sector hit again: second scam of Rs 3,695 cr Rotomac promoters being probed

Press Trust of India  |  New Delhi 

Days after the Modi-PNB scam, the banking sector took another big

hit with Rotomac pen promoter allegedly swindling Rs 3,695 crore from a consortium of seven banks, prompting two central probe agencies to register cases against him and carry out searches today at his premises in The (CBI) and the Enforcement Directorate(ED) are already probing two complaints from the Punjab National Bank(PNB) against billionaire diamantaire Modi and a jewellery company alleging fraudulent transactions worth about 11,400 crore. The banks involved in Rotomac's case, in which the as well as the ED have registered separate cases, with the defaulted loan amount in brackets were of Baroda (Rs 456.53 core), of (Rs 754.77 crore), of Maharashtra (Rs 49.82 crore), (Rs 330.68 crore), (Rs 97.47 crore), (Rs 771.07 crore) and Union Bank of (Rs 458.95 crore), according to The alleged that the accused had cheated a consortium of seven banks by siphoning off to the tune of Rs 2,919 crore without interest and and total outstanding amount along with liabilities were pegged at Rs 3,695 crore. The of the scam rattled the stock markets of these banks as Union Bank shares fell by 8.50 per cent followed by which saw a dip of 5.48 per cent in its shares. Bank of shares also fell by 4.07 per cent followed by (3.45 per cent), (1.80 per cent), (1.25 per cent) and (0.60 per cent). The CBI case, which was registered after receiving a complaint from Bank of Baroda, names Kanpur-based Rotomac Global Pvt Limited, its Vikram Kothari, his wife Sadhana Kothari, and son and unknwon bank officials. They have been booked under various sections of Indian Penal Code(IPC) related to cheating and forgery as well as Prevention of Corruption Act. Immediately after registering the case, the CBI carried out searches at three locations in which included Kothari's residence and office premises. In a simultaneous action, the ED, a probe unit that functions under finance ministry, also registered a case of alleged money laundering against Rotomac pens' promoters which had the same set of accused as that of the CBI. The ED, the officials said, would probe if the funds obtained through the alleged were laundered and if the proceeds of the crime were subsequently used by the accused to create illegal assets and black money. In the scam involving Modi that surfaced barely a fortnight ago and rocked the banking sector, the crackdown on the diamantaire and his uncle continued today with the ED seizing Rs 22 crore worth jewellery, I-T department attaching seven properties, and the CBI grilling four senior executives of his company. The K V Chowdary also swung into action and met senior officials of Punjab and National Bank (PNB) and in connection with the Rs 11,400 crore case. ED also flew down to to review the anti-money laundering investigations related to the PNB fraud, which is being conducted by a special team of the agency. With the seizure of Rs 22 crore worth jewellery by the ED today, the total amount of seizure of gems and jewellery has gone up to Rs 5,671 crore. The central probe agency also conducted searches at 38 other locations in various cities, including Mumbai, Pune, Aurangabad, Thane, Kolkata, Delhi, Jammu, Lucknow, and As part of the multi-agency probe, the Income Tax department today attached seven properties of the Gitanjali group and its promoter Mehul Choksi, uncle of Modi, in in connection with the case. While the ED was unearthing money laundering aspect of the Rs 11,400 crore scam, the CBI continued its focus on unravelling the mystery behind issuance of Letters of Understanding and Letters of Credit escaping PNB's regulatory mechanism. In order to unearth alleged corrupt practices in availing guarantees worth Rs 11,400 crore from the state-run bank, the agency today questioned Vipul Ambani, (Finance) of Modi's Fire Star Diamonds, Ravi Gupta, its Financial Office besides and Officials said Ambani had been holding the position for over three years and is believed to have been aware of the financial transactions carried out by the company of the jeweller-businessman, who fled the country before PNB reported the Rs 11,384-crore Ambani is understood to be a relative of the late industrialist, Dhirubhai Ambani. A CBI said PNB's Brady road branch was briefly sealed early this morning to prevent any "possible tampering" which was desealed later in the day. The probe agency has also started interrogating 13 other officials of the PNB, including general manager-level officers, they said. CBI officials said the agency is still questioning arrested bank officials Gokulnath Shetty, who has retired, and Manoj Kharat, single of the bank and Hemant Bhat, the signatory of Nirav Modi's company to ascertain the exact magnitude of the alleged scam that involved thousands of documents and digital records. The continued searches in this case has seen the shares falling drastically from Rs 197 to Rs 113 in the last few days.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, February 19 2018. 21:15 IST