Rishi Agarwal, the former promoter of fallen shipbuilder ABG Shipyard Ltd, in the eye of what is dubbed as India’s biggest bank loan scam, is not flashy or flamboyant like Vijay Mallya.
Yet, beneath the quiet and unassuming demeanour lurks an aggressive and ambitious businessman, who was once a rising star in the Indian shipbuilding industry.
Rishi is a nephew of the Ruia Brothers of Essar Group (Rishi’s mother is one of the six sisters of the Ruia Brothers).
Making the most of subsidy scheme
During the previous boom for global shipping in 2006-07, ABG Shipyard won many orders, riding on a subsidy scheme extended by the government to local yards. Indian yards tapped global fleet owners, who were looking to place orders at newer destinations as yards in South Korea, China and Japan could not take more contracts in the face of an ordering glut.
In fact, days before the subsidy scheme ended on August 14, 2007, after a five-year run, ABG booked many orders worth millions to take advantage of the scheme.
Some of these shipbuilding contracts were described by industry executives as “speculative orders” booked by friendly fleet owners, related parties or group companies in India and overseas. Many of these ships were never built as the collapse of Lehman Brothers in the US in 2008 crippled the global economy and cut demand for transporting commodities.
Some of the “genuine orders” given by global fleet owners were cancelled as the global economy went into a…
