The Central Bureau of Investigation (CBI) started questioning stationery czar-turned-loan defaulter Vikram Kothari at its headquarters on Wednesday morning. Kothari, who owns Rotomac Pens Limited, is being probed for defaulting loans worth Rs 2,919 crore - with bank interest around Rs 3,695 crore - which he took from a consortium of seven banks since 2008 but allegedly used the money for other business purposes than it was intended for. He was quizzed at his Kanpur house by the agency sleuths on Monday and Tuesday as well. The CBI is also probing the role of his wife Sadhna Kothari and son Rahul Kothari, and all company directors who allegedly hid information about his fake companies, in the alleged fraud. The ED, besides, conducting raids at his facilities across UP, has made sure the tycoon and his family can't exit the country through land, and sea or air, by notifying all the authorities concerned.
BoB knew about Kothari's fake firms?
Nirav Modi's PNB scam was apparently a trigger point for one of the seven consortium members (Bank of Baroda) to come forward with a request to the CBI to lodge an FIR against Kothari, who they feared might flee the country like many other billionaires, including Nirav Modi and Vijay Mallya. The central investigation agency registered a case against Vikrant Kothari after BoB's deputy general manager Brijesh Kumar Singh approached it on February 18.
The BoB, the CBI courses believe, might have panicked over the fact that he could use his money power to get away from the country, which is why they requested the CBI to seize the passports of Kothari and his family members. The BoB's inquiry into Kothari had earlier revealed he was using the loan for various purposes instead of buying wheat from overseas, reports The Indian Express. The report adds the BoB complaint to the CBI states Kothari's bank "account is of high value in this fraud case, we apprehend that directors/guarantors of the company may try to escape from the country to skip from legal/criminal proceedings."
As per the complaint, BoB, after its probe, knew that his suppliers abroad never existed. "Our representative from Hong Kong Branch visited the address given by the company for M/S Gulf Distribution Ltd and found that the company is maintaining a virtual office and any physical office...was not present at the address," the complaint says.
Seven banks, Rs 2,919-crore loan
Of the total Rs 2,919 crore principal amount (excluding interest) given to Vikram Kothari's Rotomac, Bank of India loaned Rs 754.77 crore, Bank of Baroda Rs 456.63 crore; Indian Overseas Bank Rs 771.07 crore; Union Bank of India Rs 458.95 crore; Allahabad Bank Rs 330.68 crore; Bank of Maharashtra Rs 49.82 crore; and Oriental Bank of Commerce Rs 97.47 crore.
Modus operandi, twisting of system
The inquiry reveals Vikram Kothari used different methods to seek loan from these banks. As per the allegations, in a clear violation of Fema (Foreign Exchange Management Act) Rules, he used loans availed for export to help his Kanpur-based company. He allegedly created many fake companies by furnishing forged documents to seek loans from these banks.
Kothari had availed Rs 485-crore loan from Mumbai-based Union Bank of India and Rs 352-crore loan from Kolkata-based Allahabad Bank. A year later, he didn't pay either the interest or the loan. Last year, BoB, after declared him a wilful defaulter for the loan default, and he moved the Allahabad high court seeking removal of its name. The court declared he was "wrongly declared a wilful defaulter by BoB despite having offered assets worth over Rs 300 crore since the date of default".
No scam but 'loan default': Kothari
As the CBI and the ED probes the Kothari case, he has said he'll fully cooperate with the agencies. He also said he was not willing to leave India, which he loved, and that it's just a case of 'loan default'. "First of all, it is not a scam. I am not going anywhere. I am an Indian citizen and am very much in my hometown. Though banks have declared my company as a non-performing asset (NPA), I am not a defaulter. The matter is still sub judice with the National Company Law Tribunal (NCLT). I am regularly in touch with the banks and am constantly cooperating with them. I availed the loans and will repay them soon," he said.