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Government-owned Bank of Baroda has confirmed to the stock exchanges that its exposure to the debt-laden Rotomac Global stands at Rs 456.6 crore and not Rs 800 crore as written by a certain section of the media.
Rotomac has also been declared as a non-performing asset in the bank’s books and the company and its directors were declared as wilful defaulters on February 27, 2017 which was challenged in the Allahabad High Court. The bank won the case and they were again declared wilful defaulters on July 19, 2017.
The Rotomac loan default case, pegged to be around Rs 3,695 crore due to seven banks including BoB, is being investigated by the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) who have lodged cases against the company’s owner Vikram Kothari, the businessman who defrauded seven banks by using loans meant to procure wheat and export of goods for various other purposes.
“The account was declared NPA by the bank on 3.10.2015 and has been 100 percent provided for,” Bank of Baroda said in a filing to the stock exchanges.
The fraud has also been reported to the RBI and complaint has been lodged with the CBI, ED and Directorate of Revenue Intelligence.
The public sector lender has also initiated Corporate Insolvency Resolution Process (CIRP) at NCLT, Allahabad (under the Insolvency and Bankruptcy Code) on June 9, 2017 which was admitted on September 20.
Of the total Rs 2,919 crore principal amount (excluding interest) given to 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, states the FIR filed by the CBI.
As the agencies investigate Vikram Kothari's money trail, cases have been lodged against his wife Sadhna Kothari and son Rahul Kothari, and several bank officials who allegedly helped him by hiding the information about his fake companies, or conniving with him.
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