ABG's Shipwreck

How ABG Shipyard’s promoter Rishi Agarwal used a web of group companies and connected entities to siphon off bank funds

- ANAND ADHIKARI

WITH RECORD REVENUES of ₹2,432 crore and operational profits of ₹666 crore, year 2011-12 was the best in ABG Shipyard’s nearly three-decade history. It was also the year when the Gujarat-based shipbuilder handed over a dozen vessels to its Indian and global clients. But 56-year-old Rishi Kamlesh Agarwal, Chairman and Managing Director of the flagship company of the ABG Group, was not elated. Agarwal, who studied finance in Purdue University, was more worried about the headwinds the shipping industry was facing post the global financial crisis. The industry was on the verge of plunging into a down cycle. Agarwal’s woes were compounding day after day with clients calling up to cancel contracts. And that spelt the beginning of the company’s downfall. Reason: rapid growth fuelled by excessive debt taken in anticipation of high global demand for vessels.

Sources in the know reveal that the diversion of funds actually started in those years. This was also corroborated by the forensic advisor Ernst & Young (EY) as well as an insolvency resolution professional in their reports when they scanned the company’s books of accounts between 2012 and 2016. That start has since escalated to allegedly India’s biggest banking fraud of more than ₹22,800 crore—plus some dues to others—for which Agarwal is now being investigated by the Central Bureau of Investigation (CBI).