The Enforcement Directorate (ED) has attached assets worth ₹2,747 crore belonging to ABG Shipyard Limited and its associate companies. The attached assets include a shipyard at Surat and Dahej located in Gujarat, agricultural lands and plots, various commercial and residential premises in Gujarat and Maharashtra and bank accounts owned by ABG Shipyard Ltd., its group companies and other related entities.
The ED initiated a money laundering investigation on the basis of an FIR filed on February 7 registered by the Central Bureau of Investigation (CBI) in Delhi against ABG Shipyard Limited and others.
The ED action comes a day after the CBI arrested the founder of the company Rishi Kamlesh Agarwal.
“The investigation by the ED revealed that ABG Shipyard Ltd and its chairman and managing director Rishi Kamlesh Agarwal availed various credit facilities/loans from a consortium of banks led by ICICI Bank, Mumbai, on the pretext of meeting its capital requirements and other business expenses but ABG Shipyard Ltd misappropriated the credit facilities availed from the consortium and diverted the funds for the purposes other than its actual cause in the garb of various loans/advances/investments etc. to various related entities incorporated in India and abroad, that eventually caused monetary loss to the tune of ₹22,842/- crores to the consortium,” the ED said in a statement.
The ED claimed to have traced movable and immovable assets totalling ₹2,747.69 crore belonging to ABG Shipyard Ltd, its group companies, Bermaco Energy Systems Ltd, Dhananjay Datar, Savita Dhananjay Datar, Krishna Gopal Toshniwal, Viren Ahuja and attached them under the provisions of Prevention of Money Laundering Act (PMLA), 2002.
The SBI, with an exposure of ₹2,468.51 crore, was part of a consortium of 28 banks and financial institutions led by the ICICI Bank, CBI officials had said.
The ABG Shipyard has been a major player in theIndian shipbuilding industry and operated from its shipyards located at Dahej and Surat in Gujarat. It has a capacity to build vessels up to 18,000 dead weight tonnage (DWT) at the Surat shipyard and 1,20,000 DWT at the Dahej shipyard.
The company, which had witnessed a phenomenal rise having constructed 165 vessels in 16 years, started showing stress following a global slump in the shipping industry bringing irregularities in the repayment schedule.
“The cancellation of contracts for few ships and vessels resulted in piling up of inventory. This has resulted in a paucity of working capital and caused significant increase in the operating cycle, thereby aggravating the liquidity problem and financial problem,” the complaint from the SBI, which is part of the CBI FIR, has said.
In its complaint, the SBI said there was no demand for commercial vessels because of the downturn in the industry even in 2015, which was further aggravated due to a lack of defence orders making it difficult for the company to maintain a repayment schedule.
Once the loan accounts were declared non-performing assets in July 2016, a forensic audit was ordered by the lender banks.
The audit by Ernst and Young showed that between 2012 and 2017, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust, the officials said.
Funds were used for purposes other than for which they were released by banks, they said, adding the company has been “referred to NCLT, Ahmedabad, by the ICICI Bank for Corporate Insolvency Resolution Process (CIRP)”.
The bank had first filed a complaint on November 8, 2019, on which the CBI had sought some clarifications on March 12, 2020. It filed a fresh complaint in August that year.
After “scrutinising” for over one-and-a-half years, the CBI acted on the complaint filing an FIR on February 7 this year.
(With inputs from PTI)