The ED said on Thursday it had tied up shipyards, farmland, commercial properties and bank deposits worth more than Rs 2,747 crore as part of a money laundering investigation. money related to alleged bank loan fraud against ABG Shipyard Ltd, its group companies and related entities.
The seized properties include shipyards located at Surat and Dahej in Gujarat, agricultural land and plots, various commercial and residential premises in Gujarat and Maharashtra and bank accounts belonging to ABG Shipyard Ltd., its group companies and d other related entities, the federal agency said in a statement.
The total value of the assets provisionally seized, under the Prevention of Money Laundering (Law), is Rs 2,747.69 crore.
The action by the Law Enforcement Directorate comes a day after the CBI arrested the company’s founder Rishi Kamlesh Agarwal.
Probe discovered that ABG Shipyard Ltd. and its Chief Executive Officer Agarwal availed various credit/loan facilities from a consortium of banks led by ICICI Bank, Mumbai under the guise of meeting its capital requirements and other business expenses, a said the Ed.
However, he said, ABG Shipyard Ltd. “diverted” the credit facilities available to the Consortium and “diverted” the funds for purposes other than its real cause in the form of various loans/advances/investments etc. to various related incorporated entities. in India and abroad.
These alleged illegal transactions ultimately caused a “monetary loss” to the tune of Rs 22,842 crore to the banking consortium.
The attached assets belong to ABG Shipyard Ltd., its group companies, Bermaco Energy Systems Ltd., Dhananjay Datar, Savita Dhananjay Datar, Krishna Gopal Toshniwal and Viren Ahuja, it said.
The money laundering case stems from the FIR filed by the Central Bureau of Investigation (CBI) in February.
The CBI had registered the case on a complaint by the State Bank of India for the alleged offenses of criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the Indian Penal Code (IPC) and of the law on the prevention of corruption.
The SBI, with an exposure of Rs 2,468.51 crore, was part of a consortium of 28 banks and financial institutions led by ICICI Bank, CBI officials said.
ABG Shipyard is a major player in the Indian shipbuilding industry and operates from its shipyards located at Dahej and Surat in Gujarat. It has a capacity to build vessels up to 18,000 deadweight tons (DWT) at Surat Shipyard and 120,000 DWT at Dahej Shipyard.
The company, which had seen phenomenal growth after building 165 ships in 16 years, began to show strain following the global crisis in the shipping industry, leading to irregularities in the repayment schedule.
“Cancellation of contracts for a few vessels and vessels has led to inventory build-up. This has led to a shortage of working capital and caused a significant increase in the operating cycle, thus aggravating the liquidity problem and the financial problem”, the SBI complaint, which is part of the CBI FIR, said.
In its complaint, the SBI said there was no demand for commercial vessels due to the industry downturn even in 2015, which was further compounded due to the lack of defense orders, which which made it difficult for the company to maintain the repayment schedule.
After the loan accounts were declared non-performing assets in July 2016, a forensic audit was ordered by the lending banks.
The Ernst and Young audit showed that between 2012 and 2017, the defendants colluded and engaged in illegal activities, including embezzlement, embezzlement and criminal breach of trust, officials said .
The funds were used for purposes other than those for which they were released by the banks, they said, adding that the company was “referred to NCLT, Ahmedabad, by ICICI Bank for the resolution process of the dispute. business insolvency (CIRP)”.
The bank had filed a first complaint on November 8, 2019 on which the CBI had requested clarification on March 12, 2020. It filed a new complaint in August of the same year.
After “examining” for more than a year and a half, the CBI followed up on the complaint by filing an FIR on February 7 this year.
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