ABG Shipyard bank fraud under UPA, withdrawal of states consent a challenge: CBI

The CBI said that as per banks complaint, the non-performing assets of ABG Shipyard are to the tune of 22, 842 crores and majority of disbursement took place between 2005 and 2012, this at a time when Congress-led UPA government was in power
CBI has filed a case against ABG Shipyard Ltd for cheating 28 banks to the tune of <span class='webrupee'>₹</span>22,842 crore.
CBI has filed a case against ABG Shipyard Ltd for cheating 28 banks to the tune of 22,842 crore.
Published on Feb 15, 2022 05:29 PM IST
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The Central Bureau of Investigation on Tuesday said the bank account of private shipping firm ABG Shipyard was declared a non-profitable assets as per the State Bank of India in 2013, this when the Congress-led UPA government was in power.

"As per the bank (SBI) complaint, the non-profitable assets are to the tune of 22,842 crore and majority of disbursement took place between 2005 and 2012 by a consortium of 28 banks led by ICICI and included the SBI," the central agency said in a statement.

The CBI referred to the forensic audit of the firm from 2012 to 2017 stated that the company was also referred to the national company law tribunal in Ahmedabad on August 1, 2017 by the ICICI Bank for corporate insolvency resolution process.

Also read: Finance minister attacks UPA govt over ABG Shipyard fraud

However, several banks declared the account of ABG Shipyard as fraud during the financial year 2019-2020.

The CBI referred to the records of the investigation, stating that the critical period was 2005-2012.

The probe agency cited withdrawal of general consent by the states behind delay in filing the cases.

"The withdrawal of general consent to the CBI by certain states had made filing bank fraud cases more challenging. Over 100 high value bank fraud cases couldn't be registered due to withdrawal of general consent under Section 6 of the DSPE Act," the central probe agency statement said.

Remember eight states including Maharashtra, Punjab, Rajasthan, West Bengal, Jharkhand, Chhattisgarh, Kerala and Mizoram have withdrawn consent from the CBI. All states except Mizoram are ruled by the opposition.

ABG Shipyard was incorporated in March 1985. It took loans from a lender consortium led by ICICI, followed by IDBI and SBI in early 2001. The company's bank account became NPA in Nov 2013 during UPA rule. The account was restructured in March 2014, this too under the UPA regime. 

The forensic auditor EY found diversion of funds in 2019, prompting the SBI to approach CBI in November the same year. However, investigation was hindered by states.

The CBI on Sunday had registered an FIR against ABG Shipyard and its directors including its chairman and managing director Rishi Kamlesh Agarwal.

The CBI had also carried out searches at 13 locations in the premises of accused including private directors in Surat, Bharuch, Mumbai and Pune.

"Several incriminating documents, such as books of accounts of the accused borrower company, purchase/sales details, minutes of meetings of Board, share registers, various contract files, etc were recovered which are being scrutinised. Also, bank account details of the accused as well as related parties have been obtained," the agency said.

ABG Shipyard, one of the most prominent private shipping firm is accused of defrauding 28 banks to the tune of 22,842 crore in what could be the biggest bank fraud in the history of India.
 

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    Author of Indian Mujahideen: The Enemy Within (2011, Hachette) and Himalayan Face-off: Chinese Assertion and Indian Riposte (2014, Hachette). Awarded K Subrahmanyam Prize for Strategic Studies in 2015 by Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA) and the 2011 Ben Gurion Prize by Israel.

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Wednesday, June 29, 2022