RESEARCH ASSESSMENT

Rotomac Group
Rotomac promoter, Vikram Kothari took public sector banks for a ride between 2008 - 2013 by
getting foreign letters of credit (FLCs) for making payments to his buyers and suppliers abroad who
operated from virtual offices in places like Dubai, Sharjah and Hong Kong. Rotomac Global Pvt Ltd,
engaged in intermediary trade and manufacturing pens, routinely approached 7 banks, including
Bank of Baroda's (BoB's) international business branch at The Mall, Kanpur, seeking credit ranging
from Rs 15 crore to Rs 200 crore from 2008 to 2013, mostly for exports and imports.

Instead of using the money to pay buyers/suppliers, the money was round-tripped to accounts of
Rotomac and its sister companies. For example, Rs 15.50 crore in packing credit disbursed to
Rotomac's current account for executing an export order of $4.2 million was remitted to the
company's other accounts through RTGS. Similarly, BoB gave packing credit of around Rs 34 crore
for an export order received from Starcom Resources PTE Singapore for supply of 15,700 tonnes of
wheat. This money was remitted to the account of Bargadia Brothers Pvt Ltd.

The CBI FIR claimed that Rotomac received ~Rs 16 crores from Bargadia immediately after this. "It
clearly shows that no export was made and the packing credit sanctioned was misutilised," BoB said
in its complaint to the CBI. Kothari indulged in trade for which incomplete documents were
produced, or the company submitted photocopies of bills of loading and other documents of
transactions on the pretext that original papers were sent to the importer. Most of the papers, the
CBI claimed, originated in overseas centres.

BoB alleged the company did not attach the packing list, mandatory insurance copies of goods,
certificate of origin of goods, or the inspection certificate from third parties while submitting
documents to it. When BoB officials visited Rotomac's suppliers and buyers abroad, they found that
the import/export business was allegedly running through shell companies. Our representative in
Hong Kong visited the address given by Rotomac for Gulf Distribution Ltd and found that the latter
maintained a virtual office and physical office was not present, BoB said in its complaint to the CBI.

Similarly, when BoB's Dubai branch officials visited the office of supplier Pacific Universal General,
they found only an office boy there. In Sharjah, the office of a buyer/supplier was found closed. The
bank alleged that Kothari and Rotomac violated Foreign Exchange Management Act rules and
worked for interest rate differential in local and foreign currency in the guise of trade without
having any genuine business transactions. BoB also alleged that Rotomac was routing sale
transactions from one company and purchase transactions from another.

Mission
Describe/summarize the Rotomac Group scam.
1. Provide overview of the key events
2. Explain the modus operandi and corporate links
3. Submit conclusion/current status
4. Suggest options to mitigate future recurrence

Guidelines
Report length shall be a maximum 3 pages in MS-Word format. No copy/pasting from the
internet or use of AI/ChatGPT type tools as plagiarism will lead to rejection.