Rationale

 The Enforcement Directorate (ED) has conducted search operations over Chowgule and Company Private Limited (CCPL), Chowgule Steamship Ltd (CSL) and PP Mahatme & Company under the provisions of the Prevention of Money Laundering Act (PMLA). Further, seven residential premises searched by ED included those from the Chowgule family members, including their group-chartered accountant (CA) Pradip Mahatme, ex-MD and CFO Mangesh Sawant. As per the news article, the search was related which revealed that these entities had created various offshore structures in which approximately US$228 million were diverted from Indian companies over the years by routing it through multiple foreign subsidiaries and step-down subsidiaries based in Guernsey, UK and Marshall Islands. However, as per the management, the search was related to the complaint filed by CCPL towards Rudra Shipping (foreign entity). ICRA has taken a note of the event and will keep monitoring for additional developments. The ratings remain unchanged at [ICRA]A (Stable)/[ICRA]A1. ICRA notes that discussions with the management, who have confirmed that there have not been any ED searches in Chowgule Industries Private Limited and its subsidiaries Angre Port Private Limited, Chowgule Construction Chemicals Private Limited and Chowgule Lavgan Shiprepairs Private Limited. Further, there are no operational or financial linkages at present between the two-family groups Chowgule Industries Private Limited (CIPL) and its subsidiaries (Angre Port Private Limited (APPL) and Chowgule Construction Chemical Private Limited (CCCPL)) and Chowgule and Company Private LImited (CCPL) (which includes its subsidiaries (Chowgule Streamships Limited (CSL) and Chowgule Streamship Overseas Limited (CSOL)). In addition, both the family groups expect the memorandum of family settlement (MOFS) to conclude in the near term. However, ICRA does note that the investigation includes the period from FY2009-14 when Mr. Vijay Chowgule (current CIPL chairman) was the chairman of CCPL group.