Liquidation Under NCLT Driven Process: SBI On ABG Shipyard Bank Fraud Case

The SBI said the lenders’ forum diligently follows through with the CBI in all such cases.

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New Delhi: With the Central Bureau of Investigation (CBI) registering an FIR against ABG Shipyard Ltd and its directors for allegedly defrauding a consortium of 28 banks to the tune of Rs 22,842 crore, the State Bank of India (SBI) on Sunday said the “account is presently undergoing liquidation under a NCLT driven process”, adding “at no point in time, there was any effort to delay the process”.

The SBI said the lenders’ forum diligently follows through with the CBI in all such cases.

“A fraud is declared basis the Forensic Audit report findings that is discussed thoroughly in joint lenders meetings. Typically, when a fraud is declared, an initial complaint is preferred with CBI and based on their enquiries further information is gathered,” the SBI said in a statement.

“In a few cases, when substantial additional information is gathered, a second complaint incorporating full and complete details is filed which forms basis for the FIR,” the statement added.

The SBI said ABG Shipyard, which was incorporated on March 15, 1985, has been under banking arrangements since 2001.

“Financed under consortium arrangement over a two dozen lenders. The leader in Consortium was ICICI Bank. Due to poor performance, the account became NPA on 30/11/2013. Several efforts were made to revive the company operations but could not succeed,” the statement added.

The statement further said 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 lodges the complaint with the CBI.

“The first complaint was filed with the CBI in November 2019. There was a continuous engagement between CBI and banks and further information was getting exchanged,” the statement added.

The SBI said the account was restructured under CDR mechanism in March 2014 by all lenders.

“However, as the shipping industry was going through a down turn, one of the worst ever seen, the operations of the company could not be survived,” the statement added.

The SBI further said as the restructuring failed, the account was classified as NPA in July 2016 with back dated effect from November 2013.

“E&Y were appointed as Forensic Auditor by lenders during April 2018 and they submitted their report in January 19. E&Y report was placed before the Fraud Identification Committee of 18 lenders in 2019,” the statement said.

“Fraud is mainly attributed to diversion of funds, misappropriation and criminal breach of trust,” the statement added.