Here are some fraudulent transactions by ABG Shipyard uncovered during insolvency process
Even before the CBI took the lid off the bank loan fraud committed by ABG Shipyard and its promoter and directors, some of the fraudulent transactions were already exposed by the resolution professional at the helm of its corporate insolvency resolution process that began in August 2017.
Here are some of the preferential transactions pointed out by the resolution professional in the National Company Law Tribunal (NCLT) in course of the insolvency process.
ABG Resources Pvt Ltd
ABG Shipyard transferred the rights, title and interest in 7 vehicles on 31 March 2016 (just ahead of the beginning of CIRP) to ABG Resources Pvt Ltd at a consideration of Rs 27 lakh, which was significantly lower than the market value. These transfers were done without NoC of secured creditors who had first charge over the movable and immovable assets.
Another transaction with the ABGRPL involves transfer of Rs 15.96 crore between 26 October 2015 and 6 April 2017 through ICICI Bank and Vijaya Bank. The amount was transferred as ad hoc loan but the purpose of the loan was not made transparent.
ABGRPL was involved in business of land developer, builder and contract. It only earned a revenue of Rs 5.67 crore in 2013-14, and had a negative net worth of Rs 158 crore. ABGRPL did not the financial capability to pay back the loan, said the resolution professional in NCLT.
Mahavir Distributor Pvt Limited
ABG Shipyard had made advance payment of Rs 64 crore to its vendor Mahavir Distributor Pvt Ltd between 21 April 2014 to 28 April 2014 through bank account maintained in ING Vysya Bank.
MDPL owed Rs 80.44 crore to ABG Shipyard as on 1 August 2017.
MDPL was in the business of commission agent and had earned a revenue of only Rs 2 crore and had a negative net worth of Rs 3.16 crore at the end 2015-16. One of the directors and an ex director of MDPL were employees of ABG Group companies.
ABG International Private Ltd
ABG International Private Ltd was paid Rs 34.66 as loan/advances between 16 September 2015 and 16 April 2016. “The purpose of the loan was not transparent/ clear and the intent was to defraud the creditors,” said the resolution professional in his submission to NCLT.
Nor Crane & Winch Private Ltd
ABG Shipyard had advanced an amount of Rs 97.18 crore in March 2013 to NCWPL. The resolution professional could not ascertain the nature of transaction recorded against the account of NCWPL. The Company was struck off from RoC and it had made no earnings in 2009-10 and 2010-11. It filed no financial statement from 2011-12 onwards. Ex directors of NCWPL were employees of ABG Group companies.
Varada Seven PTE
ABG Shipyard transferred Rs 421 crore to Varada between October 2012 and September 2014 through an account in Royal Bank of Scotland. These advances were provided interest free, and therefore the RP inferred that these transaction are not part of ordinary course of business.
Banal Investments and Trading Private Ltd
Banal Investments and Trading Pvt Ltd received Rs 325 crore as loans and advances between April 2015 and March 2016. Banal was involved in sale and purchases of shares, debentures and bonds. It reported no revenues in 2011-2 and 2012-13. Further it had a negative net worth of Rs 19 lakh.
Banal was struck off from RoC on 28 April 2017.
ABG Shipyard Singapore PTE Ltd
ABG Shipyard invested $67 million in ASSPL in 2012 through subscription of preference share issued by the latter.
As on 31 March 2017, a total of $66 million were outstanding. The amount was fully recoverable by way of liquidation, however, the RP noted that no efforts were made by the ex directors to recover that amount.
Also Read: A timeline of ABG Shipyard loan fraud case
