The CBI has booked ABG Shipyard Ltd for a fraud case of over Rs 22,842 crore- India’s biggest bank fraud case yet.
Contents
About The Accused
The last time a case of this magnitude was uncovered was the Punjab National Bank scam that involved fugitive diamantaire Nirav Modi and his uncle Mehul Choksi.
ABG Shipyard Ltd is the flagship company of the ABG Group which is engaged in shipbuilding and ship repair. The shipyards are located in Dahej and Surat in Gujarat.
CBI has booked the company’s then Chairman and Managing Director Rishi Kamlesh Agarwal along with others.
Accusations
They are accused of cheating a consortium of banks led by State Bank of India of over Rs 22,842 crore.
Besides Agarwal, the agency has named the then Executive Director Santhanam Muthaswamy, Directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia and another company ABG International Pvt Ltd.
The alleged offences are criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the IPC and the Prevention of Corruption Act.
The CBI said that they conducted searches on Saturday at 13 locations in the premises of the accused including a private company, directors at Surat, Bharuch, Mumbai, Pune etc which led to recovery of incriminating documents.
Banks Cheated And Dues It Owes
SBI had first filed a complaint on November 8, 2019.
It alleged that the company owes it Rs 2,925 crore, Rs 7,089 crore to ICICI Bank, Rs 3,634 crore to IDBI Bank, Rs 1,614 crore to Bank of Baroda, Rs 1,244 crore to PNB and Rs 1,228 crore to IOB.
The CBI later sought some clarifications on March 12, 2020.
The bank then filed a fresh complaint in August 2020.
CBI finally acted on the complaint after “scrutinising” for over a year and a half, filing an FIR on February 7, 2022.
Why Did They Do It?
The company was approved credit facilities from 28 banks and financial institutions with the SBI having exposure of Rs 2468.51 crore.
The Forensic Audit by Ernst and Young revealed that between 2012-17, the accused worked together and committed illegal activities such as diversion of funds, misappropriation and criminal breach of trust.
Their objective was to “gain unlawfully at the cost of the bank’s funds”.
Funds were used for purposes other than for which they were released by banks.
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