ABG scam took place between 2005-12: CBI

CBI also said it has issued lookout notices for Rishi Kamlesh Agrawal, the former chairman and managing director of the company, and eight others to ensure they do not flee India.

The Central Bureau of Investigation (CBI) said the critical period of its investigation into the bank fraud worth ₹22,842 crore involving ABG Shipyard Ltd was from 2005 to 2012 — a statement that comes after the Congress taunted the Bharatiya Janata Party (BJP) led government at the Centre for a delay in filing a case and running a “loot and escape” scheme.

ABG Shipyard is accused of cheating a consortium of 28 banks led by ICICI Bank of ₹22,842 crore. (ANI)

The Congress-led United Progressive Alliance (UPA) was in power between 2004 and 2014.

CBI also said it has issued lookout notices for Rishi Kamlesh Agrawal, the former chairman and managing director of the company, and eight others to ensure they do not flee India. The accused have been located in India, the agency added. In a rare, detailed statement, the premier investigation agency said the majority of disbursement in ABG Shipyard’s account took place between 2005 and 2012, and the loan account turned a non-performing asset (NPA) on November 30, 2013.

“As per SBI’s complaint, the NPA is to the tune of ₹22,842 crore (approx.) and the majority of the disbursement happened between 2005 and 2012 by a consortium of 28 banks led by ICICI Bank and including SBI. The account was restructured under CDR (corporate debt restructuring) mechanism on March 27, 2014. However, the operations of the company could not be revived,” CBI spokesperson RC Joshi said in a statement.

On September 10, 2014, M/s N V Dand & Associates was deputed to conduct a stock audit of ABG Shipyard, he said. The auditing firm submitted its report on April 30, 2016, and observed various faults on the part of the accused company. “Subsequently, the account of M/s ABG Shipyard Ltd was declared NPA on July 30, 2016 w.e.f. November 30, 2013,” the statement added.

SBI filed a complaint with the CBI on August 25, 2020, but the agency filed a first information report earlier this month; the Congress has targeted the Centre for the delay. Commenting on the delay, a CBI officer, requesting anonymity, said: “There are 28 banks involved in consortium with huge amount of disbursement. There was different nature of bank loans including CC (cash credit) loan, term loan, letter of credit, bank guarantee, etc. that were given as advance by the banks, and verification for all these documents takes time.”

Referring to the forensic audit conducted by EY (initiated in 2018) for a period from 2012 to 2017, CBI said on Tuesday:

“As per the usual practice, these forensic audits cover a period starting approximately three to four years prior to the date of declaration of NPA, which, in this case, was 2016.” It was this audit that found fraud.

Various banks of the consortium declared the account of ABG as “fraud” between April 2019 and March 2020, CBI said.

“The fraud is primarily on account of huge transfer by M/s ABG Shipyard to its related parties and subsequently making adjustment entries. It is also alleged that huge investment was made in its overseas subsidiary by diverting the bank loans and funds to purchase huge assets in the name of its related parties. “During the perusal of records and initial investigation, it is seen that the critical period was 2005-2012,” Joshi said.

The central agency also asserted on Tuesday that its probe in at least 100 high-value bank frauds was hit due to withdrawal of general consent under section 6 of the Delhi Special Police Establishment (DSPE) Act by several states. West Bengal, Rajasthan, Mizoram, Jharkhand, Maharashtra, Punjab, Kerala and Chhattisgarh have withdrawn the general consent for CBI probes in their jurisdictions.

Without the states’ consent, the central agency cannot file cases or conduct raids in these states. “There are around 100 high-value bank fraud cases that could not be registered due to non-accordance of specific consent u/s 6 of DSPE Act by state governments where the general consent has been withdrawn,” Joshi said.

To be sure, the ABG Shipyard case has no link to section 6 DSPE Act as it was registered by the Delhi branch of the CBI.