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    ABG Shipyard

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    hosinif986

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    ABG Shipyard

    Uploaded by

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    Download as pptx, pdf, or txt
    4 views11 pages

    ABG Shipyard

    Uploaded by

    hosinif986

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    ABG SHIPYARD SCANDAL

    Ravi Teja (SRO0687543)


    B15,Adv ITT
    INTRODUCTION
     ABG Shipyard Ltd is a part of the ABG Group
    of companies with diversified business
    interests.
     It is headquartered in Mumbai.

     ABG became one of the largest private ship

    building companies in India with a capacity


    to manufacture vessels up to 20 tonnes in
    weight.
     In January 2019, a forensic audit by E&Y

    revealed that ABG had defrauded a 28-


    member consortium of bankers to the tune of
    Rs 22000 crores.
    KEY PEOPLE

    Rishi Kamlesh Agarwal


    (former chairman and managing
    director)

    o Santhanam Muthuswamy
    (former executive director of ABG Shipyard Ltd)

    o Ashwini Kumar
    ( Director of ABG Shipyard Ltd)
    REASON FOR EXECUTNG SCANDAL
     The company had already taken multiple
    projects on hand and with a slowdown in the
    shipping industry the orders got cancelled.
     Due to this the situation became worse as

    ABG failed on paying multiple interest


    payments.
     The NCLT Ahmedabad Branch undertook an

    investigation and appointed E&Y as the


    suitors.
     The report submitted by E&Y mentioned that

    due to the global downturn of the shipping


    industry lead to execute scandal.
     Company had literally no business in the
    FACTS
     In 2020, the ABG Shipyard scandal came to

    light,revealing a massive bank fraud case.


     It involved the misappropriation of funds

    borrowed from a consortium of 28 banks.


     ABG Shipyard allegedly diverted funds throug

    h the creation of 27 paper companies and


    38 Singapore-based entities.
     These funds, meant for business operations,

    were instead used for personal gains and inv


    estments in tax havens.
     The fraud resulted in a financial loss of
    o The investigation was spearheaded by the
    enforcement Directorate (ED) and the
    Central Bureau of Investigation (CBI).
    o Earlier in October 2016, Standard Chartered bank
    filed a criminal complaint with Economic Offences
    Wing in Maharashtra for cheating them of
    Rs 200 crore loan as they failed to repay the
    short-term loan.
    o The money spread in these banks is ICICI (7089
    Crore Rs), IDBI (1614 crore Rs), SBI (2925 Crore
    Rs), PNB (1228 Crore Rs.), Bank of Baroda (1244
    Crore Rs.), Indian Overseas Bank (1228 Crore Rs.)
    etc.
    CONSEQUENCES
     The Central Bureau of Investigation has
    arrested it's promoter Rishi Kamlesh Agarwal.
     The CBI has seized incriminating documents,

    i.e account books of ABG Shipyards, its sale-


    purchase details, minutes of board meetings,
    share registers, contract files.
     N V D and Associates was deputed to conduct

    a stock audit of ABG Shipyard Ltd in the Year


    2016.
     Look Out Circulars (LOCs) against the accused

    have already been opened by the CBI. The


    State Bank of India had also opened LOCs
    against the main accused in 2019.
    FINANCIAL POSITION
    Amount in Crores

    Source :Moneycontrol.com

    Amount in Crores

    Source:Moneycontrol.co
    m
    SHARE PRICE FLUCTUATIONS

    Source:Moneycontrol.com
    CONCLUSIONS
     Banks and Financial institutions must conduct
    proper verification on creditworthiness of
    borrower before disbursement of loan.
     Banks must regularly monitor repayments of

    loan.
     Cross verification of documents must be

    done by banks with help of third party


    sources.
     Investor must go through the Annual Report

    of the company before investing.

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