Rotomac Scam of Rs. 3695 Crore: All You Need to Know
The Rotomac promoter, Vikram Kothari, is the son of founder of Kothari Product Ltd, Late Mansukhbhai Kothari who pioneered the company with the launch of an iconic mouth freshner brand, 'Pan Parag' in 1973.
Mumbai: India is, unfortunately, becoming a land of scams. From Vijay Mallya to Nirav Modi, the businessmen are fleeing the country with Criminal tag attached on their heads. One of the most recent scams that has been brought to our notice is that of Vikram Kothari. The Rotomac promoter is alleged in a Rs. 3,695 crore scam.
The Rotomac promoter, Vikram Kothari, is the son of founder of Kothari Product Ltd, Late Mansukhbhai Kothari who pioneered the company with the launch of an iconic mouth freshner brand, ‘Pan Parag’ in 1973. They then took the country by storm by launching Rotomac pens in early 1990s to bring about affordable ballpoint pens and stationery. Javed Akhtar, Raveena Tandon and Salman Khan were the famous ambassadors for Rotomac Pens those times. However, in 1999 the two sons of Late Mansukhbhai split ways and Vikram Kothari who was the Vice President at that point resigned leaving younger brother Deepak with his shares.
Rotomac soon bagan to fail since there were cheaper roller pens now available in the market. His rechristened company Rotomac Global Pvt Ltd is his venture into real estate and mall business.
The Bank of Baroda (BoB) declared Vikram a defaulter in paying back his loans in February 2017 but he received an order in his favour from Allahbad High Court in contest of the tag. The CBI then filed an FIR on Sunday against Vikram Kothari alleged by BoB. According to senior CBI officials, the scam began in 2008 and it amounted to “misappropriation of funds, criminal breach of trust and violation of FEMA (Foreign Exchange Management Act) guidelines”. “The case was registered late on Sunday night, upon a complaint by the Bank of Baroda (BoB) against Rotomac Global Pvt. Ltd, and it’s directors Vikram Kothari, Sadhana Kothari and Rahul Kothari,” said a senior CBI official, who have all requested anonymity.
According to the agency, Rotomac has cheated on 7 banks by not repaying loans of Rs. 2,919 crores which amounts to Rs 3,695 crores including interest. Of this, the CBI FIR revealed, Rotomac owed Rs. 754.77 crore to Bank of India, Rs. 456.63 crore to Bank of Baroda, Rs. 771.07 crore to Indian Overseas Bank, Rs. 458.95 crore to United Bank of India (UBI), Rs. 330.68 crore to Allahabad Bank, Rs. 49.82 crore to Bank of Maharashtra, and Rs. 97.47 crore to the Oriental Bank of Commerce (OBC).
The FIR also added to it’s statement that the loans were sanctioned to another ‘fake company’ from where the money was taken back into Rotomac. “The money was utilized for purposes other than executing export orders—credit sanctioned from the export order received from Singapore for supply of wheat was diverted to another company called Bargadia Brothers Pvt. Ltd (Singapore). Later, the money was remitted to Rotomac’s account by Bargadia. In other cases, the money disbursed for procurement of goods for export was not utilized for this purpose and no export order was executed by the company,” the CBI official added.
The Bank of Baroda sat on this case for 2 yrs before filing an FIR fearing that Kothari might also leave the country like Nirav Modi. The Bank on Sunday in its report said, “Since, this account (Rotomac) is of high value in this fraud case, we apprehend that directors/guarantors of the company may escape from the country to skip the legal/criminal proceedings,”. “Public money of the bank is at stake and after escape of the directors of the companies from India, (it) will be cause of emanating various other legal intricacies like extradition as well,” it added.
It also requested the CBI to seize the Kothari family’s passport.
While so many scams have come forward in the recent times, it is a threat to the public money that is being handed out as loans and the banks surely need to monitor and manage their loans better.
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