In a significant development in the Rotomac Global fraud case, the Enforcement Directorate (ED) has facilitated the release of properties valued at about ₹380 crore, paving the way for recovery by victims, secured creditors and other legitimate claimants. The assets, attached under the Prevention of Money Laundering Act (PMLA), will now be handled by the liquidator appointed in the insolvency process of Rotomac Global Private Limited.
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CBI FIR Triggered the Probe
The ED’s investigation is rooted in a First Information Report filed by the Central Bureau of Investigation, which alleged that Rotomac Global had cheated Bank of Baroda of ₹456.38 crore through irregularities in export transactions and misuse of credit facilities. The allegations formed part of a larger banking fraud that had come to light in 2018, prompting multiple agencies to launch parallel investigations.
Properties Attached in 2018 Across Kanpur and Ahmedabad
As part of its probe, the ED attached several immovable properties on May 28, 2018. These included:
- Factory premises,
- Industrial plots,
- Land parcels located in Kanpur and Ahmedabad.
These assets were brought under attachment on the grounds that they represented the proceeds of crime. Following the attachment, the ED also filed prosecution complaints before the designated PMLA court.
Banks Relinquished Security Interest in Favour of Liquidator
The properties in question had originally been mortgaged with a consortium of public sector banks. However, after the insolvency proceedings against Rotomac Global began, the lenders decided to relinquish their security interests in favour of the official liquidator. The step was taken as part of the broader resolution process under the Insolvency and Bankruptcy Code (IBC).
Once the charge was relinquished, the liquidator moved an application before the Special Court, seeking release of the attached properties. The liquidator argued that the assets were rapidly losing value, the financial burden on creditors was mounting, and substantial recovery was possible only if the properties were released and monetised without further delay.
ED Did Not Oppose; Court Ruled in Favour of Liquidator
The Enforcement Directorate, after examining the request, chose not to oppose the application. The agency noted that the liquidation process under the IBC could proceed more efficiently if the assets were handed back, enabling equitable distribution among creditors and other rightful claimants.
Following the ED’s position, the Special Court ordered the release of the properties in favour of the liquidator. This will allow the liquidator to initiate valuation, auction and other necessary steps to realise the maximum possible value from the assets.
Significance of the Court’s Decision
The Rotomac case is among the prominent banking fraud matters that have strained the balance sheets of several public sector banks. Often in such cases, a tug-of-war between PMLA attachments and IBC procedures slows down recoveries. The court’s nod in this instance signals a practical, coordinated approach that may help streamline recoveries in similar matters.
The court order also recognises that prolonged attachment of depreciating assets does little to help banks or victims recover their dues. Allowing the liquidator to take charge ensures that the assets can be sold through transparent bidding processes, improving the possibility of a better realisation.
Next Steps in the Liquidation Process
With the properties now released, the liquidator can proceed with:
- Fresh valuation exercises,
- Public auctions or other transparent sale methods,
- Distribution of proceeds among secured creditors and legitimate claimants.
This development is expected to speed up the recovery process that had been stalled for years.
The release of ₹380 crore worth of assets in the Rotomac Global case marks an important step towards financial recovery for banks and other stakeholders affected by the alleged fraud. It also reflects growing coordination between investigative agencies and insolvency authorities, a trend that may help strengthen India’s mechanisms for resolving large corporate defaults.
