A day after the Central Bureau of Investigation (CBI) arrested former ABG Shipyard Limited CMD Rishi Kamlesh Agarwal in a ₹22,842 crore bank fraud case, the Enforcement Directorate (ED) on Thursday attached properties to the tune of ₹2,747.68 crore of the company.
The agency said that the attached assets include the shipyards 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 registered a case of money laundering based on the CBI First Information Report (FIR) registered in February this year against ABG Shipyard Limited and others.
On Wednesday, Agarwal was called for questioning at the CBI headquarters during which the investigating officer suspected that he was not cooperating in the probe and was evasive in responses, following which he was arrested.
The ED said that its probe revealed that ABG Shipyard Ltd and its Chairman and Managing Director Agarwal availed various credit facilities or 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. then misappropriated the credit facilities and diverted the funds for purposes other than its actual cause in the garb of various loans or advances or investments etc. to various related entities incorporated in India and abroad, which eventually caused monetary loss to the tune of ₹22,842 crore to the consortium.
The ED said it has traced movable and immovable assets totalling ₹2747.69 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 the Prevention of Money Laundering Act (PMLA).
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, causing irregularities in the repayment schedule.
“The cancellation of contracts for a few ships and vessels resulted in the piling up of inventory. This resulted in a paucity of working capital and caused a significant increase in the operating cycle, thereby aggravating the liquidity problem and financial problem,” the complaint from the SBI, now part of the FIR, alleged.
The SBI, with an exposure of ₹2,468.51 crore, was part of a consortium of 28 banks and financial institutions led by ICICI Bank.
The ABG Shipyard, a major player in the Indian shipbuilding industry, operates from its shipyards located at Dahej and Surat in Gujarat with a capacity to build vessels up to 18,000 dead weight tonnes (DWTs) at the Surat shipyard and 1,20,000 dead weight tonnes (DWTs) at the Dahej shipyard, the CBI said.
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 FIR said.