The Rotomac fraud which swelled to Rs 3,700 crore has all the makings of a high-profile scam. The Rotomac group never produced details of the trade that it carried out under the mercantile segment.
Rotomac had only submitted photo copies of the bills of the merchant transactions to the bank, the Bank of Baroda has alleged in its complaint. The bank alleges that it was kept in the dark as Rotomac Global Private Limited submitted fake documents in the name of fictitious companies.
The Central Bureau of Investigation which is probing the case questioned Rotomac owner, Vikram Kothari and several others. The mobile numbers of Kothari's family, his staff and domestic helps have been confiscated.
The bank in its complaint said that the company had misutilised the facility and submitted documents related to mercantile trade on the basis of which chain of the transaction could not be established.
Further the complaint also stated that the representative from the Hongkong Branch visited the address given by the company for M/S Gulf Distribution Ltd. It was found that the company was maintaining a virtual office and there was no office present on the address.
The CBI's FIR said that the credit sanctioned for export order received from M/S Starcom Resources, Singapore, for supply of 15,700 MT of wheat was diverted to another company M/S Bargadia Brothers Pvt Ltd Singapore. Later the money was remitted to Rotomac.
In other cases money disbursed for procurement of goods for export was not utilised for this purpose and no export order was executed by the company. Money remitted to suppliers for procurement of goods for export disbursed through Packing Credit Account was settled from remittances received from third parties, not related to export transactions, the CBI also said.
The CBI also alleged that the company was working for interest rate differential in local and foreign currency in addition of Merchanting trade. There was no genuine business transactions carried out by the company. The entire business operation was carried out through fictitious and front companies. The company submitted false and forged document and thereby dishonestly induced bank to advance money and thereby cheated bank and fraudulently siphoned off funds causing financial loss to the bank and wrongful gain to itself to the tune of Rs. 456 crore which is still outstanding and to be recovered from the company, its directors guarantors ie accused persons.