Rotomac promoter Vikram Kothari arrested by SFIO; held for manipulating balance sheet to take loans

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Updated: Mar 20, 2020 12:31 PM

Rotomac former director Rahul Kothari and son of Rotomac promoter Vikram Kothari have been arrested for their alleged involvement in the manipulation of bank statements to obtain bank funds.

fraud, rotomac promoter, serious fraud investigation office, sfio,frost international MD of Frost International Uday Desai and CEO Sujay Desai have been taken into custody for fraudulent round-tripping of funds and manipulating financial statements to get funds from banks.

The Serious Fraud Investigation Office has arrested four officials of Rotamac and Frost International, in cases related to manipulation of bank statements and fraudulent round-tripping of funds. While Rotomac former director Rahul Kothari and son of Rotomac promoter Vikram Kothari have been arrested for their alleged involvement in the manipulation of bank statements to obtain bank funds, the managing director of Frost International Uday Desai and CEO Sujay Desai have been taken into custody for fraudulent round-tripping of funds and manipulating financial statements to get funds from banks.

At present, there is a loan default of Rs 4,000 crore on the Rotomac group, while the Frost International group has not paid its liabilities up to Rs 3,500 crore. Both the companies reportedly have their liabilities towards PSU banks. Rotomac Group and Frost International used to forge their balance sheets to make them appear healthy and showed it to banks in order to collect more funds. They used a technique called merchanting trade scheme for rotation of funds to continuously manipulate their book of accounts to show it shinier in front of the public sector financial institutions.

Also Read: Vivad se Vishwas e-filing facility: Race against time for tax dispute resolution

Last year, the government had asked the Serious Fraud Investigation Office (SFIO) to investigate the operations of 11 companies including Rotamac Group and Frost International. Meanwhile, in connection with over Rs 450 crore alleged loan default case of Bank of Baroda in 2018, the Central Bureau of Investigation had filed a charge sheet against Rotomac Global and its promoters. A separate case under the Money Laundering Act was also filed against it by the Enforcement Directorate (ED).

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