BoB sat on Rotomac case for 2 years, ran to CBI after Nirav Modi scam broke

NEW DELHI: Bank of Baroda had classified the Rs 435 crore loan given to Vikram Kothari-run Rotomac Global a "non-performing asset" in October 2015 and a "fraud" in December 2017 but it came running to investigating agencies on Sunday after the Nirav Modi swindle came to light, fearing that Kothari too might leave the country.

The public sector bank remained silent for two years despite facing a Rs 6,172 crore forex scam in 2015 in which money was sent from India to Hong Kong for import of cashewnuts, pulses and rice, but nothing was imported and the money was deposited in 59 accounts of several firms.

In the BoB forex scam, also called trade-based money laundering, first reported by TOI in May 2015, the CBI had arrested the bank's assistant general manager S K Garg and the head of forex division Jainesh Dubey. The BoB's delayed action in the Rotomac case came after it was unable to recover dues from Kothari.

In its complaint on Sunday, filed on behalf of six other banks, BoB 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 CBI to "seize the passports of Vikram Kothari, his wife Sadhana Kothari and son Rahul".

Investigators said BoB should have approached the agencies in 2015 itself or in December 2017 when the NPA was declared a "fraud". According to Reserve Bank Of India and Central Vigilance Commission guidelines, banks are mandated to report such irregularities to the CBI, the Enforcement Directorate and other law enforcement agencies.

The CBI has registered an FIR in the matter and the Kotharis are being questioned while his properties have been sealed. The bank is examining the role of its staff in Kanpur and other branches.

Rotomac allegedly 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. Instead of using the money to pay buyers/suppliers, the money was roundtripped to accounts of Rotomac and its sister companies.

Meanwhile, the tax department attached 14 bank accounts of Kothari and family members on Tuesday.