ED said it has issued a provisional order yesterday under the Prevention of Money Laundering Act (PMLA) for attachment of properties "owned by M/s Rotomac Global Private Limited and its directors located at Kanpur, Dehradun, Ahmedabad, Gandhi Nagar, and Mumbai."
Discounted LC would either go to Rotomac or Kothari
The ED probe revealed that Rotomac indulged in trading with a limited number of buyers and sellers and used to receive back the discounted LC (letters of credit) amount from the overseas beneficiary after deduction of 1.5-2% commission by them.
This amount would either go directly into accounts of Rotomac Group companies or into the accounts of overseas companies controlled by owner Vikram Kothari.
Accused defaulted in meeting their payments by siphoning off funds
This discounted LC amount thereafter has been used by the firm for "other business activities" such as FDR, iron ore purchase, and investment in real estate.
It said the overall modus operandi to perpetrate this alleged bank fraud was that the accused, in the guise of merchanting trade, defaulted in meeting their payments obligation to the bank by "diverting and siphoning off the funds."
This is the second major bank fraud to surface in the recent past after the sensational over $2 billion Punjab National Bank (PNB) fraud, allegedly committed by diamond merchant Nirav Modi and his uncle Mehul Choksi, the promoter of the Gitanjali Group of companies.