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CBI FIR against shipping company for cheating 28 banks of ₹22,842 crore
ABG Shipyard, the flagship of the ABG Group, has facilities in Gujarat’s Surat and Dahej for shipbuilding and repair
In what could the biggest bank fraud case in India, ABG Shipyard Ltd has been booked by the Central Bureau of Investigation for cheating a consortium of 28 banks and financial institutions to the tune of ₹22,842 crore.
The federal anti-corruption agency has named ABG Shipyard’s chairman and 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 filed on February 7 under criminal conspiracy, cheating and prevention of corruption laws. HT has seen a copy of the FIR.
ABG Shipyard, the flagship of the ABG Group, has facilities in Gujarat’s Surat and Dahej for shipbuilding and repair. The company is learnt to have constructed over 165 vessels, including 46 for overseas customers, in the past 16 years.
HT could not locate the company’s representatives on Saturday and the company’s website was not functional.
The action by CBI was prompted by a complaint filed by the State Bank of India. The total exposure of 28 banks and financial institutions is ₹22,842 crore, of which the ABG Shipyard owes ₹7,089 crore to ICICI Bank, ₹3,639 crore to IDBI Bank, ₹2,925 crore to State Bank, ₹1,614 crore to Bank of Baroda, and ₹1,244 crore to Punjab National Bank, among others.
A forensic audit carried out by consultancy EY revealed that between April 2012 and July 2017, the accused persons colluded and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust. The loan account was declared bad in July 2016.
The State Bank’s complaint stated that a global crisis impacted the shipping industry due to fall in commodity demand and prices and a subsequent fall in cargo demand. There was no demand for commercial shipping vessels as the industry was going through a downturn even in 2015, it said.
ABG Shipyard’s case was referred to the National Company Law Tribunal and a resolution professional was appointed. The FIR states that the role of public servants in the matter also needs to be investigated.
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 lenders.