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Finance minister attacks UPA govt over ABG Shipyard fraud
Replying to a specific question on the ABG Shipyard Ltd bank fraud case in which the CBI filed an FIR last week, the finance minister said while the fraud took place when the UPA was in power
Finance minister Nirmala Sitharaman on Monday said the ₹22,842 crore ABG Shipyard fraud took place during the Congress-led UPA regime as loans were given to the company before November 2013, when it was declared a non-performing asset (NPA) and subsequently the consortium of banks, after due processes, reported the fraud to the Central Bureau of Investigation at the earliest.
Replying to a specific question on the ABG Shipyard Ltd bank fraud case where the Central Bureau of Investigation (CBI) filed an FIR last week, the finance minister said while the fraud took place when the UPA was in power, the consortium of banks acted on it swiftly during the Modi government after they received an independent forensic report on this matter. Normally, the entire process takes about 52-56 months, but in this case, banks took less, she added.
“This was a loan given well prior to 2013. It even became an NPA by 2013. So, people dig holes into which they themselves fall,” she said using Hindi phrase ‘apne pair par kulhadi marna’ for the Congress which on Sunday alleged that the biggest bank fraud in India happened under the Modi government.
The Congress termed it the biggest bank fraud, bigger than the ₹14,000 crore fraud by Nirav Modi and accused the Modi government of complicity and collusion.
Sitharaman said the Congress made the noise, not realising that the fraud happened in its tenure. “And we have taken less time to detect it… took action… CBI [filed FIR] and NCLT for resolution,” she said.
The minister was addressing media after her customary address to the Central Board of Directors of the Reserve Bank of India (RBI) where she explained the thinking behind the Union Budget 2022-23 and the priorities of the government. She was accompanied by minister of state for finance Bhagwat K Karad and RBI governor Shaktikanta Das.
State Bank of India (SBI), a member in the consortium of banks, on Sunday said ABG Shipyard was in banking arrangement since 2001 and due to poor performance the account became NPA on November 30, 2013. “Several efforts were made to revive the company operations but could not succeed. The account was restructured under the CDR mechanism in March 2014 by all lenders. However, as the shipping industry was going through a downturn… operations of the company could not revive.” ICICI Bank was the leader in the bankers’ consortium involving over two dozen lenders,SBI said.
“As the restructuring failed, the account was classified as NPA in July 2016 with backdated effect from 30th Nov. 2013,” it said. According to SBI, EY was appointed as forensic auditor, which submitted its report in January 2019 and the first complaint was filed before CBI in November 2019.
Although, ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was decided that SBI , India’s largest state-owned lender would lodge the complaint with CBI, it said. After necessary procedure, the second complaint in the case was filed in December 2020.
Speaking on the matter, Sitharaman said, “Long and short of all that noise, which [is] coming from outside… it is a pre-2013 [loans]… and as I’m sitting in RBI premises, so I don’t want to talk too much of politics. But I’m sorry the kind of noise coming biggest ‘ghotala’ [scam] in Prime Minister Narendra Modi’s time. Not at all. This was a loan given well prior to 2013..”.
Sitharaman reiterated her view on cryptocurrency and said that the government would take an informed decision after wider consultation with all stakeholders, including RBI. Speaking about the proposed public issue of Life Insurance Corporation (LIC), she said the filing of the firm’s draft red herring prospectus has sent a positive signal to the economy and investors signifying government’s commitment to its reform proposals.
Addressing the media, RBI governor Das said inflation momentum has been on a downward slope since October, and that the central bank would continue to strike a delicate balance between the need to contain the price rise and ensure economic growth.
