CBI Issues Lookout Notice Against ABG Shipyard Ex-Chairman In 'Biggest Bank Fraud Case'

The agency stated in a statement that the CBI has already issued Look Out Circulars (LOCs) against the accused while maintaining that the accused are still in India.

New Delhi: The Central Bureau of Investigation (CBI) said on Tuesday that it had issued lookout notices against the former chairman and managing director of ABG Shipyard Rishi Kamlesh Agarwal and eight others in a bank fraud case of over Rs 22,842 crore.

In a statement, the CBI said the accused have been located in India. Officials claimed the lookout alerts were issued to prevent them from fleeing the country, PTI reported.

In 2019, the State Bank of India (SBI) had also opened Look Out Circular (LOCs) against the main accused.

The CBI has booked ABG Shipyard Ltd, its then chairman and managing director Rishi Kamlesh Agarwal, and others for defrauding a consortium of banks of over Rs 22,842 crore.

The agency has also named the then executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia and another company ABG International Pvt Ltd for alleged offences of criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the Indian Penal Code (IPC) and the Prevention of Corruption Act, PTI reported.

On February 12, the CBI conducted searches at 13 different locations as part of the ongoing investigation. Officials said they had seized several incriminating documents, such as books of accounts of the accused borrower company.

SBI had first filed a complaint in the matter on November 8, 2019. The bank filed a fresh complaint in August that year. However, the CBI filed an FIR only on February 7, 2022.

"The company was sanctioned credit facilities from 28 banks and financial institutions led by ICICI Bank, with the SBI, having exposure of Rs 2,468.51 crore," CBI said.

"A forensic audit by Ernst and Young has shown that between 2012-17, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust," the statement said.

"It is the biggest bank fraud case registered by the CBI. Funds were used for purposes other than for which they were released by banks," it said.

In July 2016, the loan account was designated a non-performing asset (NPA) and a fraud in 2019.

ABG Shipyard Ltd (ABGSL) is the flagship company of the ABG Group which engaged in the business of ship building and ship-repair.

The ABGSL, a key player in the Indian shipbuilding sector, operates from shipyards at Dahej and Surat in Gujarat. It has a capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat Shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej Shipyard.

The company has constructed over 165 vessels (including 46 for export market) in the last 16 vears, including specialised vessels like the newsprint carriers, self-discharging and loading bulk cement carriers, floating cranes etc with class approval of all international classification societies like Lloyds, American Bureau of Shipping, Bureau Veritas, IRS, DNV, the SBI complaint said.

"Global crisis has impacted the shipping industry due to fall in commodity demand and prices and subsequent fall in cargo demand. The cancellation of contracts for few ships and vessels resulted in piling up of inventory. This has resulted in paucity of working capital and caused significant increase in the operating cycle, thereby aggravating the liquidity problem and financial problem," the complaint said.

The SBI said there was no demand of commercial vessels as the industry was going through a downturn even in 2015 which was further aggravated due to lack of defence orders, making it difficult for the company to maintain repayment schedule, it said.

(With PTI Inputs)