India’s Central Bureau of Investigation (CBI) has booked ABG Shipyard and others for allegedly committing a fraud of $3.02bn with several banks, PTI has reported.
Notably, this is the biggest bank fraud case registered by the CBI.
The shipbuilding firm was offered credit from 28 banks and financial institutions led by State Bank of India and ICICI Bank.
This consortium of banks had offered ABG Shipyard INR24.69bn ($326.57m) in loans.
ICICI Bank was the worst hit of the lot, having been defrauded of INR70.89bn, while IDBI Bank had an exposure of INR36.39bn. SBI was defrauded of INR29.25bn.
CBI has also booked ABG Shipyard’s former chairman and managing director Rishi Kamlesh Agarwal, then executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal, and Ravi Vimal Nevetia and another firm ABG International.
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The agency has booked the accused for criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the IPC and the Prevention of Corruption Act.
In July 2016, the loan account was declared as a non-performing asset (NPA) and fraud in 2019, which led SBI to file a complaint on 8 November 2019.
After giving clarifications to the CBI, a fresh complaint was filed in August 2020.
Citing a forensic audit by Ernst and Young, the CBI said that between 2012-17, the accused used funds to commit illegal activities such as diversion of funds, misappropriation and criminal breach of trust.
As per SBI’s complaint, ABG Shipyard is part of the ABG Group operating in the shipbuilding and ship-repair industry.
The decrease in demand and cancellation of a few contracts are among the reasons cited by SBI for the liquidity problem and financial problem.
The company has been transferred to NCLT, Ahmedabad, by ICICI Bank for the corporate insolvency resolution process.