The CBI has arrested Rotomac Chairman Vikram Kothari and his son Rahul for siphoning off bank loans worth Rs. 3,695 cr.
Before arresting them, they were questioned for four days, but they weren't cooperating and "were evasive in their replies," the agency said.
Earlier, there were reports he had fled the country, but he had denied the speculations.
Kothari has been accused of defaulting on loans worth Rs. 2,919cr- with interest Rs. 3,695cr- taken from seven banks including Allahabad Bank, Bank of India, Indian Overseas Bank and Union Bank of India.
Bank of Baroda lodged a complaint over fake mercantile trade after discovering that offices of Rotomac's suppliers and buyers in Dubai, Hong Kong and Sharjah were either closed or operating virtually.
Rotomac was allegedly taking loans for business purposes, but the money was diverted elsewhere.
For example, an export loan of Rs. 15.50cr was instead split and remitted to Rotomac Global and M/S Madrid Implex.
Another loan for M/S Starcom Resources, Singapore, for supply was diverted to M/S Bargadia Brothers and remitted to Rotomac.
Kothari allegedly created many fake companies to seek loans from banks.
The complaint alleged violation of FEMA guidelines and misappropriation of funds to the tune of Rs. 3,695cr.
CBI has charged Rotomac Global Pvt Ltd, its directors Vikram Kothari, his wife Sadhana and son Rahul, as well as unknown bank officials in the case.
They will now be questioned in custody.
I-T has already attached four of their properties in Kanpur and Ahmedabad.
Kothari has reportedly maintained that he hasn't committed fraud and plans to return all loans taken by Rotomac in due course. This was the reason he hadn't attempted to leave India or even Kanpur, his hometown, he said.
Vikram Kothari's family business was divided between him and his brother Deepak Kothari in the early 1990s.
While Vikram got Rotomac, Deepak got the Pan Parag business.
The top brass in the Rotomac business could now lose their assets as Allahabad Bank manager Rajesh Gupta had said they would sell properties if they can't repay the loans.
Love Business news?
Subscribe to stay updated.