New Delhi, 16th November 2022: The CBI has charged Kanpur-based Rotomac Global and its directors with fraud in the Indian Overseas Bank for a total of Rs 750.54 crore.
According to reports, the company, which was in the pen-making business, owes a consortium of seven banks, led by Bank of India, a total of Rs 2,919 crore. Indian Overseas Bank has a 23% exposure to this debt.
The company and its directors, Sadhna Kothari and Rahul Kothari, have been charged by the agency under several provisions of the Prevention of Corruption Act as well as IPC sections related to criminal conspiracy (120-B) and cheating (420).
Based on complaints from consortium members, the CBI and the Enforcement Directorate (ED) are already conducting numerous investigations into the company.
The Indian Overseas Bank said in its complaint to the CBI, which is now a part of the FIR, that the business was granted a non-fund-based limit of Rs 500 crore on June 28, 2012.
After a payment default, the account was classified as a non-performing asset on June 30, 2016, with an outstanding balance of Rs 750.54 crore.
To satisfy the company’s foreign trade needs, the bank allegedly issued 11 Letters of Credit (LC), but all of them descended, totaling Rs. 743.63 crores, leaving the bank with no security.
A comprehensive set of documentation for the trade that the company conducted was not produced, and all LCs were issued in favor of two parties—Fareast Distributors and Logistic P Ltd and RBA Venture Ltd.
The bank asserted that the legitimacy of the commercial vessel and voyages claimed in the bills of lading is called into question by the lack of paperwork.