CBI Books ABG Shipyard in Biggest Bank Fraud Case of Over Rs 22,842 Crore

SBI had first filed a complaint on 8 November 2019, on which the CBI sought clarifications on 12 March 2020.

CBI books ABG Shipyard in their biggest bank scam case yet

(Photo: The Quint)

The Central Bureau of Investigation (CBI), in their biggest bank fraud case yet, booked ABG Shipyard and its Directors Rishi Agarwal, Santhanam Muthuswamy, and Ashwini Kumar on Saturday, 12 February, for allegedly defrauding 28 banks of Rs 22,842 crore.

Officials also held Santhanam Muthaswamy, the executive director of the company in 2012, along with other directors, including Sushil Kumar Agarwal, Ravi Vimal Nevetia and Ashwini Kumar, accompanied by ABG International Pvt Ltd, another company, responsible.

Details of the Case

ABG Shipyard is a shipbuilding company based in Mumbai, the shipyards of which are located in Gujarat, in Dahej and Surat.

"They took a loan of Rs 1,228 crore from Indian Overseas Bank, Rs 1,244 crore from Punjab National Bank, Rs 1,614 crore from Bank of Baroda, Rs 7,089 crore from ICICI Bank and Rs 3,634 crore from IDBI Bank. Later, they didn't pay the bank their dues. Initially, the bank started an internal inquiry in which it was found that the company was cheating the consortium of banks by diverting funds to different entities."

A CBI source told IANS

Muthaswamy, Sushil Kumar Agarwal, Ravi Vimal Nevetia, Ashwini Kumar and other have been named in the FIR for cheating, criminal conspiracy, criminal breach of trust and abusing of official position under IPC and the Prevention of Corruption Act.

The State Bank of India had initially lodged a complaint in 2019 on 8 November, according to which, the accused owed Rs 2,925 crore to the bank.

A fresh complaint was submitted by SBI in August 2020 after which CBI kept “scrutinising” the matter until 7 February 2022, when they acted on the FIR.

"Huge amounts were allegedly transferred by ABG Shipyards to its related parties and subsequently adjustment entries were made. Bank loans were diverted and huge investment was found to be made in the overseas subsidiary. The funds were diverted to purchase huge assets in the name of its related parties."

A CBI official

The Forensic Audit showed that between the years 2012-17, ABG Shipyard and others had conspired together and indulged in illegal activities like diversion of funds, criminal breach of trust, and misappropriation.

Funds were used for other purposes than for which they were released by the banks, the CBI's FIR read.

(With inputs from PTI and IANS.)