Rotomac Pens Fraud - How Vikram Kothari conned 7 banks ?

In the year 2017, India woke up to one big news of two magicians named as Vijay Mallya & Nirav Modi .Their names ashore so much equal to Shah Rukh Khan ever did. After a year later,another tycoon was also blown out. But  I am sure none of us have ever heard of Rotomac - How a Rs 3700 crore con was penned ? 

Now all the question arises - What is Rotomac ? How much did it take Vikram Kothari to be-fraud more than one bank in a same way ? Who else was behind it ? Did he get punished or flew away as like others ? Above all, Is our judicial system bowing down its great pride in-front of the biggest criminals, our Indian history has ever seen ? After all, where is he NOW ???? 

Rotomac Scam is one of the scams which has wiped out almost Rs 3695 crores of the public sector banks and the main master mind behind this successful operation was Vikram Kothari, the owner of the Rotomac Group of Companies.

                                               In 1973, the famous Indian brand name  '' Pan Parag '' was started by Mansukh Bhai Kothari.

                                                        Mansukh Bhai Kothari had two sons named Deepak Kothari and Vikram Kothari. In 1999, Vikram Kothari and Deepak Kothari separated and divided their businesses.  In this separation Deepak Kothari got the business of Pan Parag, while Vikram Kothari got the business of Rotomac Stationary.

Due to the slowdown in stationary business, Vikram Kothari started new business of Real Estate and Import-Export. This scam is mainly related to Import-Export business of Vikram Kothari. Vikram Kothari took the loan of Rs 2919 crores from many public sector banks like BOB, BOI. UBI etc. in illegal manner. But he has not returned, even a penny which has now increased to Rs 3695 crores with interest.

Vikram Kothari used to take the loan to import the materials from other countries by getting '' Foreign Letters of Credit '' (FLC) for making payments to his buyers and suppliers abroad who operated in virtual offices in places like Dubai, Sharjah, Hong Kong etc. But he never imported any materials from the amount of loan, instead he used that money for some other purposes. He took the loan by submitting bogus documents to every bank.

 According to TIMESOFINDIA.COM -

The company adopted two different methods for diverting the funds -- loans for exports were round tripped from abroad and loans taken for purchasing exports were used domestically without executing any export order.

In a case, the company was given loan to export wheat to Singapore but it is alleged that Kothari transferred the money to a Singapore-based company Bargadia brothers which sent remittances back to the account of Rotomac Global without any export on ground.

Later on Police found out that he had many bogus companies so that he could transfer the money from one company to another and show the transactions.

According to ECONOMICTIMES.COM - 

The Enforcement Directorate on May, 2018 said it has issued a provisional order  under the Prevention of Money Laundering Act (PMLA) for attachment of properties '' owned by MS Rotomac Global Private Limited '' and its directors located at Kanpur (Uttar Pradesh), Dehradun (Uttarakhand), Ahmedabad and Gandhi Nagar (Gujarat) and Mumbai (Maharashtra) valuing Rs 177 crore.

Rotomac scam is the  '' second biggest scam of the year '' after the Nirav Modi PNB scam. Nirav left the country and there doesn't seem any hope of retaining him back, PNB has already declared it Bad Debt, which cannot be retained. But this case doesn’t seem like the other cases because Vikram Kothari is still in Kanpur where the speculations were made that he had left the country. 

CBI interrogations took place but no detention has been detained. Vikram responded that he has no intention of leaving the country, he further added that Bank has put his loans in NPA, which doesn’t make him a fraudster which the country has been tagging him with. He assured bank that he is going to pay the Loan  BACK.

Now the question arises, Why the Bank provided loan without the guarantee ?

 The reason behind this is the incorrect evaluation of Vikram’s property and the huge label of businessman family attached to him. This can be seen as Banks mistake that they were unable to make a simple proper evaluation of the assets, which now resulted in a scam.

In this case Bank of Baroda was not oblivious of the Rotomac default, but took very long time to act.

It's important to ask from RBI, how it failed to audit the bank books and missed to detect any blunder. Now it’s time for the Center to take any strict actions, otherwise people will lose hope in the banking sector and all Digital India programme will be in vain.

Indian banks will soon be on the verge of closing, if the thousand crore defaulter cases will keep arising. One of the major role in hindering the country growth is the NPA's of the bank.

Government is planning to infuse 2 lakh crore in different banks to cure the economy and the problem of NPA but we are encountering a series of cases of loan getting into NPA, if willful defaulters like Vijay Mallya, Nirav Modi and now Vikram Kothari has been added to the list.

This situation witnesses the incapacity of government and the impotence of banking laws. These big industrial tycoons escape from the country under the government's nose and finally, the money is accumulated from the taxpayers, increasing the prices of commodities and reducing facilities of the POOR.