On November 8, 2019, the State Bank of India (SBI) filed its case against ABG Shipyard Limited, one of the top-notch shipbuilders from Gujrat, and its former chairman and managing director Rishi Kamlesh Agarwal for an alleged scam for misappropriation of funds. Again, a new complaint was filed in August 2020.
After scrutinising the complaint, The Central Bureau of Investigation (CBI) booked the company under the charges of cheating a consortium of banks for a sum as large as ₹22,842 crores on February 7 this year.
The complaint was filed against a group of people, including Santhanam Muthaswamy, the then Executive Director. Ravi Vimal Nevetia, Ashwini Kumar and Sushil Kumar Agarwal, directors and the ABG International Pvt Ltd for alleged criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the IPC and the Prevention of Corruption Act.
The information from the forensic audit says that the company owed SBI 29.25 billion rupees. The list also includes ICICI bank for 70.89 billion rupees, IDBI Bank for 36.34 billion rupees, Bank of Baroda for 16.14 billion rupees, Punjab National Bank for 12.44 billion rupees and 12.28 billion rupees to Indian Overseas Bank.
CBI’s report, posted on Sunday, read that the company engaged in fraud in the form of diversion of funds, and ‘misappropriation and criminal breach of trust with and objectives to gain unlawfully at the cost of Bank’s funds”.
In a statement issued by CBI, they say, “Searches took place on Saturday at 13 different locations in the premises of the accused including all, the private company, directors at Surat, Bharuch, Mumbai, Pune etc. which led to the recovery of incriminating documents.”
SBI, today in a statement, also said that their accounts are presently under the “liquidation of an NCLT driven process”, and there is no point of time, there was “any effort to delay the process”.
SBI also mentioned that although ICICI Bank was the leading lender in the consortium, IDBI being the second, they preferred SBI to be the largest PSB lender. After the first complaint filed with CBI in November 2019, there was a continuous to, and fro engagement between the two and further information was exchanged.
Due to poor performance, ABG’s loans were declared as NPA on November 30, 2013. Efforts have been made to revive the accounts.
Congress has questions for Modi government in ABG scam
Meanwhile, the Congress party flashed at the BJP government, saying that they were running a ‘loot and escape’ flagship to help the bank fraudsters get away. They also asked why it took five years for the CBI to lodge the complaint if the liquidation proceedings began in 2017.
Congress said now Rishi Agarwal is added to the long list of bank defaulters Nirav Modi, Mehul Choksii, Vijay Mallya, Chetan Sandesara, including the rest.
In a press conference at Chandigarh, Congress spokesperson Randeep Surjewala added that the entire process of liquidation of ABG Shipyard was started in the National Company Law Tribunal (NCLT), Ahmedabad, back in August 2017. Later in 2019, the loans and bank accounts combined of ABG SHIPYARD were declared as ‘fraudulent’, and five months later, the complaint was lodged.
Although in the scene of fraud, the ‘CBI’, ‘SBI’ and the ‘Modi Government’ continued to complicate the matter in file pushing and bureaucratic wrangling.
The spokesperson further claimed that SBI had filed a second complaint with CBI later in August 2020 and pointed out that the complaints dating back to August 25, 2020, the bank has ‘exonerated all the bankers’.
Further with the statements, Congress asked the BJP Government a series of questions. It asked why it takes five years to file an FIR for frauding 28 banks. Why no FIR was lodged, no criminal action taken, later in 2019 despite ABG Shipyard accounts being declared a fraud. Why was no FIR lodged after the first complaint made by SBI to CBI, again followed by the second, do these actions not prove the complicity and connivance of those in the authority and power in the Modi Government?
Previously in 2018, the party held a press conference and publicly warned that the ABG Shipyard was a scam. They also alleged that in 2007 the company was allotted 1,21,000 square metres of land by the Gujarat state government when Narendra Modi was the chief minister.
For the past 7.5 years of the Modi government, there has been an estimate of bank frauds of ₹5 lakh 35,000 crores, which is people’s money, the Congress added.
ABG SHIPYARD is a flagship of ABG group Pvt ltd and is the leading shipbuilding and ship repair company in India. Between 2012-17 the company was sanctioned an estimated credit of ₹2468.51 crores from 28 banks. The promoters of the company allegedly committed illegal activities meanwhile.
ABG’s shipyards are located at Dahej and Suraj in Gujrat. The company has the capacity to build vessels up to 1,12,000 deadweight tonnage at Dahej and 18,000 deadweight tonnage in Surat.
ABG has constructed over 165 vessels, including 46 for export, in the past 16 years. The vessel types built by the company includes specialized vessels like the newsprint carriers, self-discharging and loading bulk cement carriers, floating cranes, naval OPV’s etc with class approval of all international classification societies like Lloyds, the American Bureau of Shipping. Bureau Veritas, IRS and DNV.