CBI files case against shipping company for cheating 28 banks of ₹22,842 crore
The Central Bureau of Investigation (CBI) has filed a case against ABG Shipyard Ltd, one of the largest private sector shipping companies in the country, for allegedly cheating a consortium of 28 banks and financial institutions led by ICICI Bank to the tune of ₹22,842 crore, the largest amount in a single bank fraud case ever.
The central anti-corruption probe agency has named ABG Shipyard Ltd’s Chairman-cum-Managing Director – Rishi Kamlesh Agarwal, executive director – Santhanam Muthaswamy and three other directors – Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia in its First Information Report (FIR) filed on February 7 under criminal conspiracy, cheating and Prevention of Corruption Act.
ABG Shipyard Ltd is the flagship company of the ABG Group and is engaged in the business of shipbuilding and ship-repair and is a major player in the Indian ship building industry. Its yards are located in Dahej and Surat in Gujarat.
The company is learnt to have constructed over 165 vessels (including 46 for export market) in the last 16 years.
According to the complaint filed by the State Bank of India (CBI) in the matter, the total exposure of 28 banks and financial institutions as on date is ₹22,842 crore, out of which the ABG owes highest amount – ₹7,089 crore to the ICICI Bank, ₹3,639 crore to IDBI Bank, ₹2,925 crore to SBI, ₹1,614 crore to Bank of Baroda, ₹1,244 crore to Punjab National Bank and so on.
A forensic audit carried out by Ernst & Young revealed that between April 2012 and July 2017, the accused persons collided together and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust.
The loan account was declared as non-performing asset (NPA) in July 2016.
The SBI’s complaint to CBI states that the global crisis impacted the shipping industry due to fall in commodity demand and prices and subsequent fall in cargo demand. It says there was no demand of commercial vessels as the industry was going through downturn even in 2015.
It says the ABG was referred to the National Company Law Tribunal and a Resolution Professional was appointed.
The CBI FIR states that role of public servants needs to be investigated in the matter.
HT could not locate the company representatives on Sunday and the website of the company was not functional.
Among other big-ticket bank frauds, the CBI is probing the Vijay Mallya case involving ₹9,000 crore, and the Punjab National Bank fraud involving Nirav Modi and Mehul Choksi, who owe around ₹14,000 crore to the banks.