Enforcement Directorate (ED) on Tuesday launched searches at premises associated with Gujarat-based shipping company ABG Shipyard and its directors in connection with an alleged money-laundering case, said officials. Sources said the raids are being conducted at multiple locations in Mumbai, Pune and Surat.
The case pertains to alleged bank loan fraud to the tune of over Rs 22,800 crore by the company.
The ED case is based on a first information report (FIR) registered by the Central Bureau of Investigation (CBI) on February 7 where it alleged that the company diverted loans handed to it by a consortium of 28 banks and used its sister concerns to round-trip funds and service other loans instead of using them for the purpose they were taken.
The CBI has already questioned several office-bearers of the company, including its promoter Rishi Agarwal, and found that ABG used 98 related companies for the routing of funds, which ED officials say point towards money laundering.
The ED has the power to attach the assets of companies and individuals involved in money laundering.
This is not the first time that ABG Group has come under the ED scanner. In 2019, the agency attached assets to the tune of Rs 963 crore belonging to a cement manufacturing subsidiary of the group in connection with its money laundering probe into the affairs of IL&FS.
As reported by the Indian Express, the ED probe had found that third-party lending by IFIN — the non-banking financial arm of the IL&FS Group — to companies like the ABG Group had caused a loss of Rs 2,000 crore to IFIN.
Earlier, a report by the Serious Fraud Investigation Office (SFIO) had found several lapses in 13 loans of around Rs 1,080 crore granted by IFIN since 2010 to ABG Group.
The probe agency had termed a few of these transactions as an “evergreening exercise”, where ABG Group used some money borrowed from IFIN to prevent its accounts from turning into non-performing assets (NPAs).
The SFIO report said that, in 2017, the Reserve Bank of India (RBI) in its report on IFIN for fiscal 2015 had red-flagged insufficient security cover in terms of exposure to ABG International, and its group firm Onaway Industries.
However, it was only in September 2018 that IFIN classified its loan to ABG Shipyard as an NPA.
In the case of State Bank of India, the primary complainant against ABG Shipyard in the FIR registered by CBI, a similar delay has been flagged.
While the loan sanctioned to the company turned NPA in 2013 and a debt-restructuring effort failed to revive it leading to a second NPA declaration in 2016, a complaint of fraud by the company was made to the CBI only in 2019.
The agency, which received a second complaint in August 2020, registered the FIR this year. (Source: Indian Express)
