Mumbai: India's multi-million dollar shipbreaking industry could be controlled by the country's most wanted man Dawood Ibrahim, according to an intelligence report by the ministry of defence.

Certain Pakistani nationals involved with organised crime syndicate D-Company, headed by Ibrahim, have taken a major stake in India's shipbreaking industry, investing tens of millions of rupees to smuggle contraband, arms and explosives with the participation of foreign agents during their ship dismantling operations, the report said.

Intelligence sources said scrap deals are used as cover-ups for money laundering purposes, as the deals are fixed by paying in hard cash with the collusion of corrupt local officials.

Indian officials said the current system, which permits a free run to vessels carrying dismantling permits, has allowed entry to criminals, a local report said.

Dawood Ibrahim was number three on the Forbes' world's top 10 most dreaded criminals list of 2011. He is currently on the wanted list of Interpol for organised crime and counterfeiting.