Bank fraud: After CBI, ED; I-T dept tightens noose around Rotomac Group

After the CBI and the ED, the Income Tax Department has tightened the noose around the Kanpur-based Rotomac group and its promoters, in connection with an alleged bank loan fraud of Rs 3,695 crore, given by a consortium of seven banks. 

According to reports, the I-T department has so far attached 11 bank accounts in connection with an alleged tax evasion probe against the Rotomac group and its promoters. 

The I-T officials reportedly said that the accounts in various bank branches in Uttar Pradesh were attached last night, and the department has carried out provisional attachment action to "recover outstanding tax demands", understood to be about Rs 85 crore.

Read More: Know more about Vikram Kothari and his modus operandi

Last month, the department had attacked three bank accounts of the group. 

CBI registers criminal case 

The CBI had registered a criminal case against Rotomac Global Pvt Limited, its Director Vikram Kothari, his wife Sadhana Kothari and son Rahul Kothari and unidentified bank officials on a complaint received from Bank of Baroda and conducted raids against them yesterday. 

The Bank of Baroda complaint alleged that conspirators cheated a consortium of bank loans to the tune of Rs 3,695 crore including the interest component. The principal amount involved was Rs 2,919 crore, CBI officials said. 

The Bank of Baroda has already declared Vikram Kothari, his wife Sadhna and son Rahul loan as defaulters. Their bank details, property documents, pen drives, laptops have been seized by the investigative agency along with their passports.

The CBI team lead by Deputy Director PK Singh is heading the probe. 

ED files money laundering case 

Subsequently, the ED has also registered a money laundering case against them. 

The ED will probe if the allegedly defrauded bank funds were laundered and these proceeds of crime subsequently used by the accused to create illegal assets and black money. 

Kothari had taken loans from the Indian Overseas Bank, Bank of Maharashtra, Bank of Baroda, Bank of India, Union Bank of India, Allahabad Bank and Oriental Bank of Commerce.

The probe is reportedly revolving around the details of loan conditions, including the details of properties against which the banks gave him such big loans. 

Rotomac owner has done no wrong: Lawyer
 
Vikram Kothari`s lawyer Sharad Birla, however, said that the Rotomac owner has done no wrong or fraud and that the case was merely of a bank loan repayment.

Further, Birla added that the case was in the tribunal and a meeting was scheduled later in the day with bank officials. 

It may be noted here that mobile phones of all members of the Kothari family and even that of his staff and domestic helps have been confiscated.

From stationery czar to loan defaulter 

Vikram Kothari, who figured among the who's who of Indian business,  is embroiled in one of the biggest loan default cases to hit the banking sector.

In 1973, Vikram Kothari's father Mansukhbhai Kothari laid the foundation of a 'pan masala' empire. Mansukhbhai Kothari was amongst the first ones to sell paan masala in pouches and his brand -Pan Paraag- became a raging success.

Bollywood actors Shammi Kapoor and Ashok Kumar also featured in the Pan Paraag ad on TV and the brand's tagline -'Baraatiyon ka swaagat Pan Paraag se kijiye'- became very popular.

Vikram Kothari and his brother Deepak Kothari used to assist their father Mansukhbhai in managing the paan masala business.

As the business prospered, the group diversified and in 1992, and the Rotomac Pen company was formed while 'Yes', a mineral water brand, was launched a couple of years later. However, in 1999, the two brothers decided to go separate ways.

Vikram Kothari took charge of the stationery and pens enterprise, while younger brother Deepak Kothari took control of the paan masala empire.

'Rotomac' too had its glorious run and its promotional tag line - 'Likhtey, likhtey, love ho jaye', too struck a chord with many. Bollywood hearthrobs Salman Khan and Raveena Tandon were then its brand ambassadors.

Rotomac Pens Private Limited was rechristened as the Rotomac Global Private Limited, while Vikram Kothari moved into other sectors including real estate, steel and infrastructure.

The uninterrupted story of success gave ways to a contrary reality as Vikram Kothari finds himself stands accused of a bank loan default to the tune of thousands of crores.

This is the second major financial scam to break out after the sensational Rs 11,400 crore fraud allegedly committed by billionaire jewellery designer Nirav Modi and his uncle Mehul Choksi, who is a promoter of Gitanjali group of companies.

Both left the country before the Punjab National Bank realised the seriousness of the alleged crime. 

(With Agency Inputs)