Biggest Bank Fraud: THIS company cheats SBI, 27 banks of over Rs 22,842 crore

New Delhi: In its biggest bank fraud case, the CBI has booked ABG Shipyard Ltd and its former chairman and managing director Rishi Kamlesh Agarwal along with others for allegedly cheating a consortium of banks led by State Bank of India of over Rs 22,842 crore, officials said on Saturday.

Besides Agarwal, the agency has also named the 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 official position under the IPC and the Prevention of Corruption Act, they said.

“Searches were conducted on Saturday 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,” CBI said in a statement.

The bank had first filed a complaint on November 8, 2019 on which the CBI had sought some clarifications on March 12, 2020.

The bank filed a fresh complaint in August that year. After “scrutinising” for over one and a half years, the CBI acted on the complaint filing an FIR on February 7.

The company was sanctioned credit facilities from 28 banks and financial institutions led by ICICI Bank with the SBI having exposure of Rs 2468.51 crore, the officials said.

The Forensic Audit by Ernst and Young has shown that between 2012-17, the accused colluded together and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust, they said.

It is the biggest bank fraud case registered by the Central Bureau of Investigation (CBI).
Funds were used for purposes other than for which they were released by banks, it said.

The loan account was declared as non-performing asset (NPA) in July 2016 and fraud in 2019.

In its complaint, the State Bank of India said ABG Shipyard Ltd (ABGSL) is the flagship company of the ABG Group which engaged in the business of ship building and ship-repair.

The ABGSL being a major player in the Indian ship building industry operates from shipvards are located at Dahej and Surat in Gujarat with capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat Shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej Shipyard.

The company has constructed over 165 vessels (including 46 for export market) in the last 16 years including specialized vessels like the newsprint carriers. Self-discharging and loading bulk cement carriers, floating cranes etc with class approval of all international classification societies like Lloyds, American Bureau of Shipping. Bureau Veritas, IRS, DNV, the complaint said.

“The global crisis has impacted the shipping industry due to fall in commodity demand and prices and subsequent fall in cargo demand. The cancellation of contracts for few ships and vessels resulted in piling up of inventory. This has resulted in paucity of working capital and caused significant increase in the operating cycle. Thereby aggravating the liquidity problem and financial problem,” the complaint said.

The SBI said there was no demand of commercial vessels as the industry was going through downturn even in 2015 which was further aggravated due to lack of defense orders making it difficult for the company to maintain repayment schedule, it said. Also Read: Muthoot Finance net profit up 4% at Rs 1,044 crore in Dec qtr

“The company has been referred to NCLT, Ahmedabad, by ICICI Bank for CIRP,” it said. Also Read: Max Healthcare Q3 profit stands at Rs 190 crore

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