Despite being aware of a potential fraud in the Rotomac account for the past two years, Bank of Baroda (BoB) approached investigation agencies only this Sunday fearing Rotomac owner Vikram Kothari might leave the country like diamantaire Nirav Modi did after the PNB fraud case came to light, reports The Times of India.
The bank had, in fact, classified a Rs 435-crore loan to Rotomac Global as a non performing asset (NPA) in October 2015 and a ‘fraud’ in December 2017.
BoB remained silent for two years even though they were facing a Rs 6,172 crore likely forex scam under which money sent from India to Hong Kong for import of cashew nuts, pulses and rice was deposited in 59 accounts of several companies. BoB waited until it became obvious Kothari will be unable to repay his dues.
The above-mentioned fraud, also known as the trade-based money laundering, resulted in the Central Bureau of Investigation (CBI) arresting the bank’s assistant general manager SK Garg and the head of forex division Jainesh Dubey.
In the bank’s complaint on Sunday, which was filed on behalf of six other banks said, “Since, this account (Rotomac) is of high value in this fraud case, we apprehend that directors/guarantors of the company may escape from the country to skip the legal/criminal proceedings.”
It added: “Public money of the bank is at stake and after escape of the directors of the companies from India, (it) will be cause of emanating various other legal intricacies like extradition as well.” It requested the top investigation agency to “seize the passports of Vikram Kothari, his wife Sadhana Kothari and son Rahul.”
The CBI said BoB should have come to them in 2015 itself or even in December 2017 when the NPA was declared a ‘fraud’.
According to the central bank and the Central Vigilance Commission (CVC) guidelines, banks are required to report such irregularities to the CBI, the Enforcement Directorate (ED), among other law enforcement agencies.
The CBI registered an FIR in the matter and the Vikram Kothari and his son are being questioned and the agency has also sealed their properties. From the bank’s end, the bank is examining the role of its staff in Kanpur, Kothari’s business hub and hometown, and other branches.
The pen-firm is believed to have got Foreign Letters of Credit (FLCs) from BoB for making payments to its buyers and suppliers abroad, who operated from virtual offices in places like Dubai, Sharjah and Hong Kong. However, it is said that the money was instead being roundtripped to accounts of Rotomac and its sister companies.moneycontrol