According to sources, the CBI has charged Kanpur-based Rotomac Global. Additionally, it has accused its directors of fraud and illegal activities in the Indian Overseas Bank for a total sum of Rs 750.54 crore.
The firm, which was in the writing instrument sector, also owes a total of Rs 2,919 crore. It owns the sum to a group of seven banks that is led by the Bank of India, with Indian Overseas Bank having a 23% exposure.
The company, along with its directors, Rahul Kothari and Sadhna Kothari, have been charged by CBI. They are accused under many charges and provisions of the Prevention of Corruption Act. Additionally, IPC sections that are related to criminal conspiracy (120-B) and cheating (420).
As per the accusations from members of the consortium, the CBI and the staff members of the Enforcement Directorate are already conducting various investigations and inquiries against the firm.
The Indian Overseas Bank stated in their complaint to the CBI, which is now also a part of the FIR. It claimed that the business was granted a non-fund-based limit of a total of Rs 500 crore on June 28, 2012.
On June 30, 2016, after a payment default, the account was categorized as a non-performing asset. The total outstanding balance mentioned was Rs 750.54 crore.
CBI issued 11 letters of credit
In order to satisfy the foreign trade needs of the company, the bank allegedly released 11 Letters of Credit (LC). However, all of them descended, totaling Rs. 743.63 crores. Moreover, leaving the bank with no security.
A comprehensive set of documentation for the company’s trade was not produced. However, all LCs were issued in favor of two parties—Fareast Distributors and Logistic P Ltd and RBA Venture Ltd.
The bank asserted that the commercial vessel and voyages claimed in the bills of lading are not accurate because there is no documentation in support.
The bank’s forensic audit allegedly revealed account book manipulation and failure to disclose liabilities resulting from LCs.
The audit also highlighted errors in the relevant voyages, bills of lading, and sale contracts.
It said that all the four parties belonged to the same owner, and the group received 92% of all sales, totaling Rs 26,143 crore.
“The major supplier to these parties is Rotomac Group, whereas the major buyer for these parties is Bunge group. The major seller of products to Rotomac group is Bunge group. All the four overseas customers have linkage with the group,” the bank claimed.
The forensic audit “significantly flagged” several indicators that show the corporation didn’t engage in any actual business transactions.
The corporation is accused of defrauding the bank and fraudulently siphoning off money, causing it to suffer financial loss and make unjust gains of Rs. 750.54 crore, which has yet to be recovered from the suspects.