CBI Files FIR In ABG Shipyard Bank Fraud Case: PTI Report
The Central Bureau of Investigation has filed a first information report in an alleged Rs 22,842 crore bank fraud case related to ABG Shipyard Ltd., according to a report by Press Trust of India.
The FIR names ABG Shipyard's then 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, the news agency reported.
The action follows a complaint filed by State Bank of India in 2019. ABG Shipyard had defaulted on loans worth Rs 2,925 crore to SBI, 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 to Punjab National Bank and Rs 1,228 crore to Indian Overseas Bank, according to separate report published by NDTV.
The CBI alleges that bank funds were used for purposes other than for which they were released by banks, NDTV reported.
ABG Shipyard was engaged in shipbuilding and ship repair.
The company went under corporate debt restructuring in March 2014. In September 2016, the company had sought shareholder approval for allowing lenders to convert up to Rs 16,397-crore of debt in exchange for more than 51% stake in the company under the Reserve Bank of India's strategic debt restructuring (SDR) mechanism. The proposal was rejected.
In 2017, ABG Shipyard found itself in a list of companies that the RBI identified for insolvency proceedings. Liquidation was initiated in 2019 after a potential bid from Liberty House was rejected.
In a clarification issued on Sunday, SBI said the company's account is presently undergoing liquidation process before NCLT.
'The account is presently undergoing liquidation under an NCLT driven process... At no point in time was there any effort to delay the process.'
The bank said that it had filed the first complaint against ABG Shipyard with the CBI in November 2019. A second and the more comprehensive complaint was filed a year later, in December.
Although ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI -- being the largest PSB lender -- lodge the complaint with the CBI, the statement said.
ABG Shipyard was incorporated on March 15, 1985 and has been in banking arrangements since 2001.
The company was financed under a consortium arrangement, which had two dozen lenders.
Due to poor performance, the account was classified as non-performing asset on Nov. 30, 2013. After which, several efforts were made to revive the company operations. But all efforts failed.
"The account was restructured under CDR mechanism in March 2014 by all lenders. However, as the shipping industry was going through a downturn, one of the worst ever seen, the operations of the company could not be revived. As restructuring failed, the account was classified as NPA in July 2016 with effect from November 2013", SBI statement said.
E&Y was appointed as forensic auditor by the lenders in 2018. The report was subsequently placed before the Fraud Identification Committee.
(EY's report) mainly attributed the fraud to diversion of funds, misappropriation, and criminal breach of trust.SBI's statement
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