Scam Unveiled: ED Seizes Assets Worth Rs. 12.20 Crore in Ship Building Contract Fraud
(Judicial Quest News Network)
May, 14, 2024, The Directorate of Enforcement (ED), Kochi Zonal Office, has taken a significant stride in unravelling a complex web of financial malpractice. On May 10, 2024, the ED provisionally attached properties valued at Rs. 12.20 Crore, comprising 35 movable properties including securities, imported machineries, bank balances, and 2 Landing Barges totalling Rs. 10.07 Crore, along with 4 immovable properties valued at Rs. 2.13 Crore.
These assets were seized from M/s. Vipul Shipyard P Ltd, Goa, M/s. Vipul Shipping Engineering Works, Goa, and their directors under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The investigation, initiated by the ED, stemmed from a charge sheet filed by the Central Bureau of Investigation (CBI) under various sections of the Indian Penal Code, 1860, which are scheduled offenses under the Prevention of Money Laundering Act, 2002.
According to the charge sheet filed by CBI, Cochin, between 2004 and 2010, Shri JVS Rao, the then Vice President of SCIL Mumbai, allegedly entered into a criminal conspiracy with M/s Vipul Shipyard Private Limited, Goa (VSPL), and its directors. This conspiracy revolved around the awarding of a Ship Building contract to VSPL for constructing six 200 Passengers capacity Landing Barges for the Union Territory Lakshadweep (UTL).
In furtherance of this alleged conspiracy, the shipbuilding contract was awarded to VSPL, despite its ineligibility. VSPL did not participate in the tender process, lacked adequate infrastructure, had an insufficient financial position, and lacked prior experience in constructing similar vessels. Consequently, the vessels failed to meet the technical specifications and were unable to fulfil the buyer’s requirements. Furthermore, VSPL failed to deliver the vessels within the stipulated period, resulting in a substantial revenue loss of approximately Rs. 12.20 Crore sustained by the Public Sector Undertaking (PSU).
ED’s investigation uncovered that the accused entity and its directors fraudulently obtained the shipbuilding contract from SCIL by forging documents. Additionally, they received nearly Rs. 12.20 Crore from M/s. SCIL without renewing the bank guarantee. The proceeds of this alleged crime were then diverted into the personal accounts of the directors.
The provisional attachment of assets marks a crucial step in the ongoing investigation. ED’s relentless pursuit of justice aims to unearth the truth behind this intricate financial fraud and hold the perpetrators accountable for their actions. As the investigation progresses, further revelations are expected to shed light on the extent of the scam and bring closure to those affected by this egregious exploitation of public funds.
