The Enforcement Directorate (ED) today conducting searches at multiple premises in Mumbai, Pune and Surat in connection with a money laundering probe against ABG Shipyard.
As many as 24 locations are being searched in these cities by the federal agency
The ED has filed a money laundering case against the company and its promoters for defrauding banks of Rs 22,842 crore. The agency’s case is based on the predicate offence registered by the Central Bureau of Investigation (CBI) in the matter.
According to sources, the investigation into the alleged fraud committed by ABG Shipyard Ltd (ABGSL) has revealed that the accused set up at least 98 companies to divert funds that were then used to create personal assets and evergreening loans.
“The fraud is primarily on account of a huge transfer by M/s ABG Shipyard Ltd to its related parties and subsequently making adjustment entries. It is also alleged that huge investments were made in its overseas subsidiary by diverting bank loans. The critical period of the investigation is 2005-2012,” the CBI said in a press release at an earlier occasion.
Sources said that the company availed mainly three different types of loans from 28 banks. The monies raised through these loans were then diverted through 98 sister concern companies and used to create personal assets.
“This is a complex scam which involves circular transactions and use of shell companies to layer them. The loans were availed either for the purpose of evergreening of the loans or to create assets for the accused,” said an official privy to the development.
The probe has found between 2007 and 2009, properties worth Rs.83 crores were purchased out of security deposits provided by ABG SL through nine related parties.
“On March 15 and 16, 2016, funds amounting to Rs 15 crores and Rs 16 crores were transferred to ABG Energy respectively by ABG SL. On the same days, funds amounting to Rs 31 crores in two flow transactions were received from ABGInternational in the form of refund of accommodation deposits,” the FII filed by CBI reads. “This indicates that these may not be actual refund of accommodation deposit previously paid by ABG SL amounting to Rs 31 crores and only potential circular transactions,” the FIR adds.
In its complaint, the bank has affixed a report prepared by the forensic auditor EY which has found that, “… between April 2012 and July 2017, the accused had collided together and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust and for the purpose other than the propose for which the funds were released,” the FIR states quoting the audit report.