Bank loan

CBI delivers ABG shipyard for biggest bank loan fraud

New Delhi: In its biggest bank fraud case, the CBI has hired ABG Shipyard Ltd and its former Chairman and Managing Director Rishi Kamlesh Agarwal and others for allegedly deceiving a consortium of banks led by the State Bank of India by more than Rs 22,842 crore, officials said on Saturday.

Apart from Agarwal, the agency also named then-executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia and another company ABG International Pvt Ltd for alleged offenses of criminal conspiracy, cheating , criminal breach of trust and abuse of power. position under the IPC and the Prevention of Corruption Act, they said.

“Searchs were carried out on Saturday at 13 locations at the premises of the defendants including a private company, administrators in Surat, Bharuch, Mumbai, Pune, etc. which led to the recovery of incriminating documents,” said CBI in a statement.

The bank had filed a first complaint on November 8, 2019. After “examining” for more than a year and a half, the CBI followed up on the complaint by filing an FIR on February 7.

The company was sanctioned with credit facilities from 28 banks and financial institutions led by ICICI Bank, with the SBI having an exposure of Rs 2,468.51 crore, the officials said.

The Ernst and Young forensic audit showed that between 2012 and 2017, the defendants colluded and engaged in illegal activities, including embezzlement, embezzlement and criminal breach of trust, have- they stated.

This is the largest bank fraud case recorded by the Central Bureau of Investigation (CBI). The funds were used for purposes other than those for which they were released by the banks, he said.

The loan account was declared non-performing asset (NPA) in July 2016 and fraud in 2019. In its complaint, the State Bank of India said that ABG Shipyard Ltd (ABGSL) is the flagship company of ABG Group which is engaged in the shipbuilding and ship repair business.

ABGSL, a major player in the Indian shipbuilding industry, operates from shipyards located in Dahej and Surat in Gujarat with the capacity to build vessels up to 18,000 Deadweight Tonnage (DWT) ) at Surat Shipyard and 120,000 Deadweight Tonnage (DWT) at Dahej Shipyard.

The company has built over 165 vessels (46 of them for the export market) over the past 16 years, including specialty vessels like newsprint carriers. self-unloading and loading bulk cement carriers, floating cranes, etc. with class approval from all international classification societies such as Lloyds, American Bureau of Shipping. Bureau Veritas, IRS, DNV, according to the complaint.

“The global crisis has impacted the shipping industry due to the decline in demand and prices for raw materials and the subsequent decline in demand for freight. The cancellation of contracts for a few ships and vessels led to an accumulation of inventory. This led to a shortage of working capital and resulted in a significant increase in the operating cycle, thus aggravating the liquidity problem and the financial problem, “the complaint states.

The SBI said there was no demand for commercial vessels as the industry was going through a downturn even in 2015, which was further aggravated due to lack of defense orders, making it difficult for the company to maintain the repayment schedule, he said.

“The company was referred to NCLT, Ahmedabad by ICICI Bank for CIRP,” he said.