Updated: February 21, 2018 8:11:36 am
Nirav Modi’s escape abroad, within two years of Vijay Mallya similarly hoodwinking the law after allegedly defaulting on banks loans worth hundreds of crores, seems to have let panic loose on the banking sector, and investigators believe the complaint by Bank of Baroda (BoB) against Vikram Kothari of Rotomac could be a result of this panic. The CBI registered a case on the bank’s complaint on February 18.
In the first page of the complaint, before even explaining the alleged fraud, BoB made a request for confiscation of passports of Kothari, promoter and director of Rotomac Global Pvt Ltd, and his family members to prevent them from escaping abroad, according to investigators. Investigators said BoB had already conducted a full-fledged investigation and concluded that Rotomac was diverting loan funds for long. “It appears they were still hopeful that Kothari would return the money. But after Nirav’s escape, they panicked,” according to an official who is part of the probe.
Kothari is accused of defaulting on loans amounting to more than Rs 3,600 crore from a consortium of seven banks, led by Bank of India. The loans were disbursed since 2008, and Kothari has been defaulting for several years now. But BoB, one of the consortium banks, approached CBI with a complaint only after news of Nirav’s escape became public and there were speculations that even Kothari could have followed a similar path. In its complaint, BoB stated, “Since this account is of high value in this fraud case, we apprehend that directors/guarantors of the company may try to escape from the country to skip from legal/criminal proceedings.” Read | Who is Vikram Kothari?
Requesting urgent action, BoB stated that “public money of the bank is at stake”, and the company directors’ escape abroad will result in “various other legal intricacies, such as extradition…”. Therefore, the complaint stated, “to check the corporate debtor from escaping from the country we request earnestly to seize passport or confiscate from its bearers who are directors/guarantors of the company — Mr Vikram Kothari, Mrs Sadhana Kothari and Mr Rahul Kothari.” Sadhana and Rahul are both directors at Rotomac.
The complaint is signed by Brijesh Kumar Singh, deputy general manager and regional head of Bank of Baroda, Kanpur. The complaint shows that BoB had made detailed inquiries into Rotomac’s alleged dubious business, and even found that its suppliers in overseas destinations did not even have a physical office.
The complaint stated, “Most transactions of this company are with (a) limited number of buyers, sellers, sister companies and subsidiary companies.” After the company defaulted on loans, the bank launched a probe on its overseas suppliers. “…(The) bank decided to visit offices of the company’s suppliers and buyers. 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.
BoB even listed a car loan of Rs 80 lakh that Kothari allegedly defaulted on. Their questioning continued on Tuesday, the CBI said. Besides BoB and BoI, the consortium includes Indian Overseas Bank, United Bank of India, Allahabad Bank, Bank of Maharashtra and Oriental Bank of Commerce.
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