In the biggest bank fraud case so far, the CBI has booked ABG Shipyard Ltd along with its former chair and Rishi Kamlesh Agarwal, the managing director, for cheating a consortium of well-known banks spearheaded by the SBI of more than Rs 22,842 crore, officials reported Saturday.
The bank initially launched a complaint on 8 November 2019 on which the CBI had sought clarifications on 12 March 2020. The bank was compelled to register a fresh complaint in August that year. On “scrutinizing” for more than one and a half years, the CBI began acting on the complaint after filing an FIR on 7 February.
The company owes Rs 2,925 crore to SBI while to ICICI Bank it owes Rs 7,089 crore, to IDBI owes it Rs 3,634 crore, to Bank of Baroda it owes Rs 1,614 crore, and to PNB it owes Rs 1,244 crore, and to IOB it Rs 1,228 crore.
The officials added that the firm was granted credit from nearly 28 financial institutions, including banks led by the ICICI Bank with the SBI experiencing exposure of approximately Rs 2468.51 crore.
The Forensic Audit led by EY has proved that from 2012 up to 2017, the accused had colluded and taken part in illegal activities, such as the misappropriation and diversion of funds and breach of trust.
To date, it is the biggest recorded bank fraud to be registered by the CBI. The funds were allegedly used for multiple purposes other than for which the banks had sanctioned.
The loan account was reportedly declared to be a non-performing asset (NPA) in 2016 (July) and announced a fraud three years later, in 2019.
In the complaint, the SBI mentioned that ABG Shipyard Ltd (ABGSL), the flagship firm of the ABG Group, had taken part in the lucrative business involving ship repair and building.
The firm has been involved in the construction of 165 plus vessels (including 46 for the export sector) over the last 16 years. It has also made specialized vessels such as newsprint carriers, self-discharging, as well as floating cranes and bulk cement carriers. These were done with the approval of top-notch international classification societies, like Lloyds.
The SBI said that there could have been no demand for commercial vessels as the maritime industry had been experiencing a major downturn even seven years back, in 2015. The situation was aggravated by the lack of defense orders, making it incredibly hard for the enterprise to maintain a proper repayment schedule.