Enforcement Directorate attaches Rs 177 crore assets in Rotomac bank fraud case 

The agency said it has issued a provisional order yesterday under the Prevention of Money Laundering Act (PMLA) for attachment of properties "owned by Ms Rotomac Global Private Limited.

Published: 29th May 2018 02:34 PM  |   Last Updated: 29th May 2018 02:34 PM   |  A+A-

Rotomac Pens owner Vikram Kothari and his son Rahul Kothari escorted by CBI officials. (File photo | PTI)

By PTI

NEW DELI: The Enforcement Directorate (ED) today said it has attached assets worth Rs 177 crore in connection with its money laundering probe against Kanpur-based Rotomac group in an alleged bank loan fraud of Rs 3,695 crore.

The agency said it has issued a provisional order yesterday under the Prevention of Money Laundering Act (PMLA) for attachment of properties "owned by Ms Rotomac Global Private Limited and its directors located at Kanpur (Uttar Pradesh), Dehradun (Uttarakhand), Ahmedabad and Gandhi Nagar (Gujarat) and Mumbai (Maharashtra) valuing Rs 177 crore.

It alleged that these assets were the "proceeds of crime" of the illegal act of money laundering. The ED probe revealed, the agency said in a statement, that Ms Rotomac Global Private Limited "indulged in merchanting trade with limited number of buyers and sellers and it used to receive back the discounted LC (letters of credit) amount from the overseas beneficiary after deduction of 1.5-2 per cent commission by them either directly into the accounts of Rotomac group companies or into the accounts of overseas companies controlled by owner Vikram Kothari."

"This discounted LC amount, it said, thereafter has been used by the firm for "other business activities" such as FDR (fixed deposit receipts), iron ore purchase and investment in real estate. It said the oversall modus operandi to perpetrate this alleged bank fraud was that the accused, in guise of merchanting trade, without having any genuine business transactions defaulted in meeting their payments obligation to the bank by "diverting and siphoning off the funds."

The ED had filed a criminal case under the PMLA in this instance in February, based on a CBI FIR.

The ED-CBI case has been registered against firm director and owner Vikram Kothari, his wife Sadhna Kothari, son Rahul Kothari and unidentified bank officials on a complaint from the Bank of Baroda.

The bank had alleged that the conspirators had cheated a consortium of banks to the tune of Rs 3,695 crore, including the interest component. The principal amount involved is Rs 2,919 crore.

The ED probe was aimed at finding out if the funds obtained through the alleged fraud were laundered and if the proceeds of the crime were subsequently used by the accused to create illegal assets and black money.

This is the second major bank fraud to surface in the recent past after the sensational over USD 2 billion Punjab National Bank (PNB) fraud, allegedly committed by diamond merchant Nirav Modi and his uncle Mehul Choksi, the promoter of the Gitanjali Group of companies.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp