ABG Shipyard, one of the leading names among the private sector shipping firms, has been booked by CBI for cheating a consortium of twenty-eight banks of a whopping Rs. 22,842 crores. By far, this is the biggest bank fraud case to be reported to date in India. In addition to Agarwal, Santhanam Muthuswamy, Ashwini Kumar, Sushil Kumar Agarwal, and Ravi Vimal Nevetia have been named in the case. A statement was released by CBI on Saturday confirming that it conducted searches in thirteen locations in the premises of the accused. The searches helped them in recovering incriminating documents associated with the fraud.
The What and Why
ABG Shipyard located in Dahej and Surat in Gujarat is a part of the ABG Group. It is one of the leading names in the country involved in shipbuilding and repair. In the past 16 years of its existence, the company has been credited with the construction of about 165 vessels, 46 of which were for overseas customers. This included specialized vessels like the newsprint carriers. The shipyard located at Surat has the capacity to build vessels up to 18,000 DWT while the shipyard in Dahej can hold a capacity of 1,20,000 DWT. The group is backed by Rishi Agarwal who is a leading figure in the Indian shipbuilding industry.
It was a complaint from the State Bank of India that threw light on the case. A whopping amount of Rs. 22,842 has been cheated of from the SBI consortium of 28 banks and other financial institutions. A total of Rs. 7089 crore is owed by the ABG Shipyard to ICICI Bank, Rs. 3639 crores to IDBI Bank, Rs. 2925 crores to State Bank, Rs. 1614 crores to Bank of Baroda, and Rs 1244 crores to Punjab National Bank among several others.
The case holds the record of being the biggest fraud to be ever reported by the Central Bureau of Investigation, much bigger in magnitude than the Punjab National Bank scam which included Nirav Modi and Mehul Choski. A complaint had been filed by SBI back in November 2019, following which the CBI had asked for some clarifications the next year. Another complaint was lodged again in 2020. After a “scrutinizing” period spread over one and a half years, the CBI finally filed a complaint on the 7th of February. In addition to this, a Forensic Audit by Ernst and Young brought to light some shocking details about the accused alleging them of illegal activities like diversion of funds, criminal breach of trust, and misappropriation.