New Delhi: 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.
