The Central Bureau of Investigation Thursday arrested Rotomac Global owner Vikram Kothari and his son, Rahul, in connection with the compnay’s Rs 3, 695 crore loan default case. The CBI arrested the duo after four days of questioning, reports The Indian Express.
According to the report, IE’s agency sources said the Kotharis were arrested as they did not cooperate with investigations despite four days of sustained questioning in Kanpur.
CBI had booked Rotomac Global Pvt Ltd, Kothari, his wife Sadhana and son Rahul for allegedly defaulting on Rs 3,695 crore in loans taken from a consortium of seven banks.
Kothari constantly maintained that he had not committed fraud and would have returned theRotomac loan in due course, the report said quoting sources. He also said this was the reason he had not attempted to leave the country or even Kanpur.
Kothari was brought to Delhi for questioning on Wednesday but is expected to be taken to Lucknow where he will be produced before a special court to seek remand. Sources said he was brought to Delhi to change the “environment of questioning” and take him out of his comfort zone. Till Tuesday, CBI had questioned him at his house in Kanpur.
According to CBI and a complaint filed by Bank of Baroda (BoB), the loans were granted, beginning 2008, for the purported import of wheat among other products, but in most cases nothing was imported and the money was allegedly diverted.
BoB is among several banks and has an outstanding loan of Rs 456.63 crore from Rotomac. Apart from BoB, the consortium includes, Bank of India, Indian Overseas Bank, United Bank of India, Allahabad Bank, Bank of Maharashtra and Oriental Bank of Commerce.
“The credit sanctioned and disbursed to the company was utilised for purposes other than executing export orders,” the CBI FIR said.
It details that packing credit of Rs 15.50 crore, disbursed on January 25, 2012, to execute an export order of $4.18 million was split and remitted to Rotomac Global (Rs 10 crore) and M/S Madrid Implex (Rs 5.35 crore for purchase of jewellery).
Citing another similar transaction as an example of the fraud carried out by Rotomac, the CBI FIR said, “Credit sanctioned for export order received from M/S Starcom Resources, Singapore, for supply of 15,700 MT (million tonnes) of wheat was diverted to another company M/S Bargadia Brothers Pvt Ltd Singapore. Later the money was remitted to Rotomac.”
According to the FIR: “… In other cases money disbursed for procurement of goods for export was not utilised for this purpose and no export order was executed by the company. Money remitted to suppliers for procurement of goods for export disbursed through Packing Credit Account was settled from remittances received from third parties, not related to export transactions.”
This, the FIR said, “is misappropriation of funds, criminal breach of trust, and violation of Foreign Exchange Management Act (FEMA) guidelines”.