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After Rotomac, Another Kanpur Firm Under Scanner For Loan Default

For recovery of the amount, banks have sold four units which have been shut down, while to recover Rs 3,972 crore, Central Bank was the first one to reach DRT. Later this case was transferred to NCLT on 30th November 2016 for compromise considering it sick unit.

Qazi Faraz Ahmad | News18.com@qazifarazahmad

Updated:February 28, 2018, 2:39 PM IST
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After Rotomac, Another Kanpur Firm Under Scanner For Loan Default
File photo of Punjab National Bank (File photo: Reuters)

Lucknow: After Kanpur-based Rotomac owner Vikram Kothari, another firm in Kanpur, Shri Lakshmi Cotsyn Limited, has allegedly defrauded a consortium of 16 banks of over nearly Rs 3,972 crore.

Central Bank, the leading bank of the consortium that gave loans to the firm, has already started auctioning firm’s assets for the recovery of loans. The firm’s office is registered at Krishnapuram on GT Road in Kanpur, while the Group Chairman and Managing Director is MP Agarwal. Apart from textiles, the company also makes automobiles blast proof.

The accumulated loss of Shri Lakshmi Cotsyn slowly surpassed the capital amount, which led to grim chances of the revival of the company. According to the information, the loss of the firm is around Rs 1646.12 crore. The long term loan amount of the firm is Rs 2,406 crore, while short term loan is around Rs 937 crore.

For the recovery of such a huge amount, the company’s assets are valued at Rs 1,495 crore as per the balance sheet, and that too, when these assets are sold at the book value. The amount deposited in various banks by Shri Lakshmi Cotsyn is around Rs 2.54 crore only, while the running cost of the company is Rs 577 crore but the income of the company floats around Rs 311 crore.

Banks kept on giving new loans to the firm to get rid of old loans and eventually the company was in debt. For recovery of the amount, banks have sold four units which have been shut down. For the recovery of Rs 3972 crores, Central Bank was the first one to reach DRT, later this case was transferred to NCLT on 30th November 2016 for compromise considering it sick unit.

A consortium of 16 banks who gave loans to Shri Lakshmi Cotsyn Pvt Ltd includes Central Bank, which is the lead bank of the consortium, while Syndicate Bank, Union Bank, Canara Bank, Bank of Baroda, Punjab National Bank, Indian Bank, State Bank of India, Exim Bank, Oirental Bank of Commerce, IDBI Bank, Vijaya Bank, Corporation Bank, Saraswat Bank, Andhra Bank and Edelweiss Estate Reconstruction are also the part of the consortium.

Just days after the Punjab National Bank (PNB) Rs 11,360 crore fraud came to light, the parent company of Rotomac Pens was accused of fleeing with loans of more than Rs 800 crore from various government banks in the country. According to sources, the owner of the company, Vikram Kothari, had taken a loan of more than Rs 800 crores from five government banks. Kothari took a loan of Rs 485 crore from Union Bank of India and a loan of Rs 352 crore from Allahabad Bank. A year later, Kothari has been reported to not have paid back either the interest or the loaned amount.

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