CBI investigating Rotomac promoter for ₹3700-crore loan default

People walk past as CBI team seals Punjab National Bank’s South Mumbai branch at Brady House in Mumbai on Monday

Mumbai: State-owned Bank of Baroda (BoB) on Tuesday said it has an exposure of Rs456.6 crore in the Rotomac Global, now being investigated by Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) in connection with an alleged bank fraud of Rs3,695 crore. The raids were conducted on Monday as well. After the company and its directors were declared wilful defaulters, the bank had reported the fraud to the Reserve Bank and a complaint lodged with the CBI, ED and Directorate of Revenue Intelligence, the filing said. "Total outstanding amount, along with interest liabilities for Rotomac is Rs 3695 crore". Media reports from Kanpur quoted Kothari as saying that talks with banks have been going on to resolve the loan issue.

Chennai: In the wake of the alleged PNB and Rotomac frauds, the government has seen the value of its investments in public-sector banks drop by about Rs 30,000 crore ($4.6 billion) in the last seven days.

Eleven bank accounts of the company have been attached and several offices have been raided for assessment of documents and records.

Informed sources said that mobile phones of all members of the Kothari family and even that of his staff and domestic helps have been confiscated. Bank of India shares fell by 4.07 percent followed by Allahabad Bank (3.45 percent), Oriental Bank of Commerce (1.80 percent), Bank of Maharashtra (1.25 per cent) and Indian Overseas Bank (0.60 percent).

The company then moved the Allahabad High Court seeking removal of its name from the list of wilful defaulter.

When Rotomac defaulted in payments, Bank of Baroda representatives visited companies suppliers and buyers. The development comes less than a week after Punjab National Bank (PNB) had detected a United States dollars 1.77 billion - about Rs 11,400 crore - scam wherein Modi allegedly acquired fraudulent letters of undertaking (LoUs) from a branch in Mumbai to secure overseas credit from other Indian lenders. "Our representative from Hong Kong Branch visited the address given by the company for M/S Gulf Distribution Ltd and found that the company is maintaining a virtual office and any physical office...was not present at the address", it said."The credit sanctioned and disbursed to the company was utilised for purposes other than executing export orders", the FIR says.



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