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The directors of the Kanpur-based Rotomac Global, Sadhna Kothari, and Rahul Kothari were booked by CBI for allegedly defrauding the Indian Overseas Bank (IOB) causing a monetary loss of Rs 750.54 crore.
Rotomac, which is in the business of writing instruments, has a total outstanding of Rs 2,919.39 crore against a consortium of seven banks. IOB has an exposure of 23% in that consortium.
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Sanjay Kishore, chief regional manager of IOB’s Lucknow branch registered an FIR on November 14 against the company and its directors Sadhna and Rahul Kothari under provisions of the Indian Penal Code (IPC)
The FIR complaint by the IOB stated that "The company was sanctioned a non-fund-based limit of Rs 500 crore on June 28, 2012. The account was declared a non-performing asset on June 30, 2016, with an outstanding of Rs 750.54 crore after default on payments. They had issued 11 Letters of Credit (LC) to meet the company’s foreign trade requirements, which all got devolved involving an aggregate amount of Rs 743.63 crore, leaving no security for the bank"
“The company did not produce the complete set of documents for the trade carried out by it, and all LCs were issued favoring two parties: Fareast Distributors and Logistic P Ltd and RBA Venture Ltd. In the absence of documents, doubts are raised on the authenticity of the trade vessel and voyages claimed in the bills of lading. The forensic audit conducted by the bank pointed to alleged manipulation in account books and non-disclosure of liabilities arising from LCs,” according to the complaint.
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