Vikram Kothari, son arrested in Rs 3.6K-cr loan scam

Rotomac Global Pvt Limited director Vikram Kothari

Rotomac pens owner Vikram Kothari and his son Rahul Kothari were arrested by the CBI on Thursday in connection with the alleged loan default of Rs 3,695 crore to a consortium of seven nationalised banks, news agency Press Trust of India has reported.

Defence advocate Pramod Kumar Dubey raised objections to the jurisdiction of the court, saying the accused should be produced before a sessions court and not before a magisterial court. The company is alleged to have submitted false and forged documents and dishonestly induced the bank to advance money thereby cheating the banks and fraudulently siphoning off funds causing financial loss to the bank and wrongful gain to itself to the tune of Rs 456 crore which is still outstanding and to be recovered from the company and the accused persons.

The amount swelled to Rs 3,695 crore, including the accrued interest, because of repeated defaults on payment, the officials said.

Apart from his son, the role of his wife Sadhna Kothari, and his company directors, is also under scanner, as they allegedly hid information about his fake companies from the banks. The bank requested authorities to confiscate the passports of Kothari and his family members. Kothari's lawyer Sharad Kumar Birla earlier claimed it was a "case of loan default and not fraud".

The Bank of Baroda had claimed that in some cases, the credit sanctioned for an export order was diverted to an offshore company and later remitted back into Rotomac without executing export order.

The Income Tax department had also attached 14 bank accounts of the pen manufacturer as part of its tax evasion probe against it on Tuesday, 20 February.

Vikram Kothari's father Mansukhbhai Kothari had successfully set up the Pan Masala brand, which became an instant hit in India.

The Enforcement Directorate has also launched a money-laundering investigation against the Kotharis. However, in 1999, the two brothers made a decision to go separate ways.

This is the second major financial scam to break out after the sensational Rs 11,400 crore fraud allegedly committed by billionaire jewellery designer Nirav Modi and his uncle Mehul Choksi, who is a promoter of Gitanjali group of companies.



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