The Central Bureau of Investigation (CBI) has registered a case against Kanpur-based Rotomac Global and its director in connection with the alleged cheating of Rs 750.54 crore with the Indian Overseas Bank (IOB).
The pen maker owes a total of Rs 2,919 crore to a consortium of seven banks led by Bank of India. Indian Overseas Bank’s share in this arrears is 23 percent.
The probe agency has registered a case against the company and its directors Sadhana Kothari and Rahul Kothari under IPC sections related to criminal conspiracy (120-B) and cheating (420), besides various provisions of the Prevention of Corruption Act.
The company is already under the scanner of the CBI and the Enforcement Directorate on the basis of complaints from members of the consortium of banks.
What are the allegations made by Indian Overseas?
In its complaint to the CBI, Indian Overseas Bank alleged that the company was sanctioned a non-fund based limit of Rs 500 crore on June 28, 2012. At the same time, the account was declared NPA on June 30, 2016, after a default of Rs 750.54 crore.
The bank alleged that it had issued 11 letters of credit (LC) to meet the foreign trade requirements of the company. All these letters were transferred, which is equal to Rs 743.63 crore.
Bank alleges that in the absence of documents
The bank alleges that in the absence of documents, the authenticity of the merchant ships and voyages claimed in the bills of lading is in doubt. The forensic audit conducted by the bank indicated alleged manipulation of books of accounts and non-disclosure of liabilities arising out of LCs. Irregularities have also been found in the sales contracts, bills of lading and related voyages in the audit. It has been said that 92 percent of the total i.e. Rs 26,143 crore was sold to the same owner and four parties of the group.
The bank alleged that the principal supplier to these parties was the Rotomac Group. Whereas the buyer on behalf of these parties was Bunj Group. The principal vendor selling products to the Rotomac group was the Bunge Group.
All four foreign clients had links with the group. The company allegedly defrauded the bank and diverted the money. This caused financial loss to the bank and the company itself wrongly earned a profit of Rs 750.54 crore. Still haven’t recovered it.
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