ED: ABG Shipyard set up 27 paper companies to divert funds
ABG Shipyard Ltd, the Gujarat-based shipbuilder accused in India's biggest bank fraud case, created 27 «paper companies» and used 38 Singapore-based group entities to divert the money borrowed from a consortium of lenders led by the ICICI Bank, the Enforcement Directorate said in its chargesheet filed recently in a Gujarat court.
'Move led to cancellation of shipbuilding contracts'
In its court documents, the federal agency that probed the money laundering aspect of the ₹22,842 crore alleged scam said part of the funds was transferred to Singapore and utilised for investments in mutual funds in tax havens. It said that the paper companies were floated only to «facilitate circular transactions» of the misappropriated funds.
The central agency alleged that ABG Shipyard's founder-chairman, Rishi Agarwal, was «keenly involved» in the diversion and misappropriation of funds.
Diversion of funds led to delays in and cancellation of shipbuilding contracts the company had secured, including from the Indian Navy for three training ships for naval cadets, it said.
According to the ED, ABG Shipyard received an advance payment of ₹75 crore from the Navy, but «Agarwal diverted the funds through some paper concerns/namesake entities and did not complete the order».
The chargesheet, a copy of which ET has seen, names Agarwal and 37 others as accused. It accuses them of having used the proceeds of crime to also acquire immovable properties, after diverting and layering the money through subsidiary companies and claiming it to be untainted.
Agarwal has denied allegations of financial irregularities against him.
Manipulating books
ED's chargesheet states that the consortium of 28 lenders had given loans to ABG Shipyard to meet its
