CBI books another case against Rotomac promoter, others in cheating case

The Central Bureau of Investigation has registered yet another case against Rotomac Group promoter Vikram Kothari and others, this time in connection with a group entity named Crown Alba Writing Instruments India Private Limited, for allegedly cheating the Union Bank of India of about ₹63.46 crore.

Among those named in the FIR are the company, Mr. Kothari, his wife Sadhna Kothari and their son Rahul Kothari. The accused are being probed by the CBI and the Enforcement Directorate in multiple other bank fraud cases. In February 2018, the CBI had arrested Mr. Kothari and his son in an alleged ₹3,695-crore “wilful” loan default case.

The latest case pertains to Crown Alba Writing Instruments India, which manufactured innovative writing instruments. However, it later started dealing in multiple commodities including brass scrap, ceramic tiles, iron ore, industrial equipment, metal sheets and wooden flooring tiles, etc.

Letters of credit

According to the bank, the company had taken credit facilities in the form of letters of credit, but it could not release the export proceeds in time for the adjustment of devolved letters of credit. The account turned non-performing asset on September 30, 2016. The company had also taken such facilities from the Bank of India and the Dena Bank.

The outstanding as on May 10, 2018, stood at ₹91.67 crore in favour of the Union Bank of India, ₹254.22 crore of the Bank of India and ₹146.94 crore of the Dena Bank. The Union Bank of India recovered ₹38.20 crore through liquidation of collaterals.

Wrong address

The FIR mentions that the Bank of India had sent emails to debtor firms of the borrowing company, named Pacific Global Resources PTE Limited and Gulf Distribution Limited, but they could not be served as the addresses were wrong.

The forensic audit revealed that a majority of sales was made to related parties being run by former/ current Rotomac Group employees or their relatives. The Letter of Credit transactions were routed through group companies Magnum FZE, Trumps International FZE, Pacific Universal General Trading, LLC& Pacific Resources Private, as alleged.

While there was no movement of goods under the Letter of Credit transactions. the company incurred foreign exchange losses that were concealed. The audit report also noted that there was a violation of the Foreign Exchange Management Act regulations in the import-export business.

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Printable version | Oct 20, 2021 4:03:49 AM |

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