YET ANOTHER FLEECE AND FLEE VENTURE

Owner of Rotomac Pens has inflicted a ‘bad debt’ of more than Rs 800 cr on 5 State-run banks. Like Nirav Modi, he too has vanished in thin air

Just when the Nirav Modi jigsaw is falling in place, the parent company of Rotomac Pens has been accused of inflicting a ‘bad debt’ of more than Rs 800 crores on Staterun banks. And if reports emanating from Kanpur are to be believed, he has ‘fled’ and the banks have no option but to attach his properties.

In the dock is the owner of the company, Vikram Kothari, who had taken this huge loan from five government banks. All these institutions — Allahabad Bank, Bank of India, Bank of Baroda, Indian Overseas Bank and Union Bank of India – went backwards to accommodate Kothari in what media sources are claiming is another replay of the Nirad Modi scam.

Kothari took a loan of Rs 485 crore from the Union Bank of India and another of Rs 352 crore from the Allahabad Bank. A year later, he has not paid back either the interest or the principal amount. Kothari’s office on Kanpur’s City Centre Road is locked for the past week. Kothari, too, has been untraceable ever since. Incidentally, he disappeared around the time the Modi scandal erupted.

Yet again, the PSU banks are twiddling their thumbs and can only hope to recover a fraction of the amount lent by selling Kothari’s properties. But recovery of this kind is easier said than done.

Yet again, the warning signals were ignored. Last year, Bank of Baroda, a consortium partner, had declared Rotomac a “wilful defaulter”. The company had then moved the Allahabad High Court seeking removal of its name from the ‘blacklist’.

Rotomac was declared a wilful defaulter vide an order dated February 27, 2017, passed by an authorised committee, as per the procedure laid down by the Reserve Bank of India. Input PTI