The CBI has booked ABG Shipyard Ltd (ABGSL), its directors/promoters, along with others, for allegedly cheating a consortium of banks of a whopping Rs 22,842 crore, the agency officials said on Saturday.
According to sources, it may be one of the biggest bank frauds which the agency is probing. The company was extended credit facilities by 28 banks and financial institutions with the State Bank of India (SBI) having an exposure of Rs 2,925 crores; the ICICI Bank ₹7,089 crores; the IDBI Bank ₹3,639 crores; the Bank of Baroda Rs1,614 crores; the Punjab National Bank Rs 1,244 crores; etc.
Searches were conducted on Saturday at 13 locations on the premises of the accused, including a private company. Also under the spotlight were the premises of the ABGSL directors -- at Surat, Bharuch, Mumbai, Pune etc -- which led to recovery of incriminating documents.
The CBI, in its FIR, has named ABGSL, its Directors/Promoters -- Rishi Agarwal, Santhanam Muthaswamy, Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia, another company, ABG International Pvt Ltd, and unknown public servants -- on charges of alleged abuse of official position, criminal conspiracy, cheating and criminal breach of trust under the sections of Indian Penal Code and the Prevention of Corruption Act.
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.
According to the CBI, the agency registered a case on a complaint lodged by the SBI against ABGSL (the borrower company), including its directors/promoters and others.
"It is alleged that the said accused had cheated the consortium of 28 banks, including the branches of the erstwhile State Bank of Patiala, New Delhi, the erstwhile State Bank of Travancore, New Delhi, the State Bank of India, Mumbai, etc. The consortium was led by the ICICI Bank.
It has been further alleged by the SBI that the accused had colluded and committed activities by way of diversion of funds for the purpose other than for which the funds were released by the bank.
Huge amounts were allegedly transferred by the said private company to its related parties and subsequently adjustment entries were made. It was also alleged that bank loans to the said private company were diverted and huge investment was found to be made in the overseas subsidiary.
It was further alleged that ‘‘funds from the banks were diverted to purchase huge assets in the name of its related parties," says the CBI statement.
According to the CBI, the SBI had first filed a complaint on November 8, 2019, to which the CBI had responded by seeking some clarifications on March 12, 2020.
The SBI filed a fresh complaint later. After "scrutinising" the matter for over one and a half-year, the CBI acted on the complaint and an FIR was filed on February 7, 2022.
"Global crisis has impacted the shipping industry due to fall in commodity demand and prices and subsequent fall in cargo traffic. The cancellation of contracts for a few ships/vessels resulted in piling up of inventory. This has resulted in a paucity of working capital and caused a significant increase in the operating cycle, thereby aggravating the liquidity & financial problems.
There was no demand for commercial vessels as the industry was going through a downturn even in 2015. Further, there were no fresh defence orders in 2015. The company was finding it very difficult to achieve milestones as envisaged in the CDR. Thus, the company was unable to service the interest and instalments on the due date," the CBI FIR stated.
The company has been referred to the National Company Law Tribunal of Ahmedabad bench for Corporate Insolvency Resolution Process, the FIR stated.