The CBI has charged Kanpur-based Rotomac Global and its directors for ₹ 750.54 crore for alleged fraud in Indian Overseas Bank, officials said.
The company, which was in the business of writing instruments, has a total outstanding of ₹ 2,919 crore against a consortium of seven banks led by Bank of India in which Indian Overseas Bank has an exposure of 23 per cent.
The agency has charged the company and its Directors - Sadhna Kothari and Rahul Kothari - under IPC sections related to criminal conspiracy (120-B) and cheating (420), besides various provisions of the Prevention of Corruption Act.
The company is already facing multiple investigations by the CBI and the Enforcement Directorate on the basis of complaints from consortium members.
In its complaint to the CBI, now a part of the FIR, the Indian Overseas Bank alleged that the company was sanctioned a non-fund-based limit of ₹ 500 crore on June 28, 2012.
The account was declared a non-performing asset on June 30, 2016, with an outstanding of ₹ 750.54 crore after default on payments.
The bank alleged it had issued 11 Letters of Credit (LC) to meet the company's foreign trade requirements, which all got devolved involving an aggregate amount of ₹ 743.63 crore, leaving no security for the bank.
The company did not produce the complete set of documents for the trade carried out by it, and all the LCs were issued favouring two parties -Fareast Distributors and Logistic P Ltd and RBA Venture Ltd.
The bank alleged that in the absence of documents, doubts are raised on the authenticity of the trade vessel and voyages claimed in the bills of lading.
The forensic audit conducted by the bank pointed to alleged manipulation in account books and non-disclosure of liabilities arising from LCs.
The audit also found irregularities in sale contracts, bills of lading and corresponding voyages.
It pointed out that 92 per cent of total sales, to the tune of ₹ 26,143 crore, were made to four parties of the same owner and group.
"The major supplier to these parties is Rotomac Group, whereas the major buyer for these parties is Bunge group. The major seller of products to Rotomac group is Bunge group. All the four overseas customers have linkage with the group," the bank alleged.
The forensic audit "substantially flagged" various indicators which point out that the company carried out no genuine business transaction.
The company allegedly cheated the bank and fraudulently siphoned off funds, causing financial loss and wrongful gain to itself to the tune of ₹ 750.54 crore, which is still to be recovered from the suspects.