New Delhi, Feb 13: The Central Bureau of Investigation (CBI) has registered an FIR against ABG Shipyard Ltd and its directors, including chairman and managing director Rishi Kamlesh Agarwal, in what could be the biggest bank fraud case in the history of India.
ABG Shipyard, one of the most prominent private sector shipping firms, was on Saturday booked for allegedly defrauding 28 banks to the tune of ₹22,842 crore. Apart from Agarwal, Santhanam Muthuswamy, Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia have also been named in the case.
The CBI had on Saturday released a statement saying searches were conducted at 13 locations in the premises of accused including private company, directors at Surat, Bharuch, Mumbai, Pune etc which led to recovery of incriminating documents.
ABG Shipyard, the flagship of the ABG Group, is one of India’s largest firms engaged in shipbuilding and ship repair, located in Dahej and Surat in Gujarat.
The company is learnt to have constructed over 165 vessels, 46 for overseas customers, in the past 16 years, including specialized vessels like the newsprint carriers. It has the capacity to build vessels up to 18,000 dead weight tonnage (DWT) at the Surat shipyard and up to 1,20,000 dwt at its Dahej facility.
The group is promoted by Rishi Agarwal, a major player in the Indian ship building industry.
The case came to light following a complaint by the State Bank of India. The SBI consortium of 28 banks and financial institutions have allegedly been cheated of a massive total of ₹22,842 crore. Of this, 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 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.
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.
