Lookout circular issued against the directors of ABG Shipyard in the case of fraud of about 23,000 crores
Highlight
- CBI has issued look out notice against Rishi Kamlesh Agarwal, former chairman of ABG Shipyard.
- Similar circulars have also been issued against 8 others in bank fraud cases involving over Rs 22,842 crore.
- Look out notices have been issued to prevent them from going out of the country.
The CBI on Tuesday said it has issued a look out notice against Rishi Kamlesh Agarwal, former chairman and managing director of ABG Shipyard, and eight others in a bank fraud case involving over Rs 22,842 crore. The agency said in a statement that Look Out Circulars (LoCs) have already been opened by the Central Bureau of Investigation (CBI) against the accused, while ensuring that the accused are located in India.
Officials said a look out notice has been issued to prevent them from leaving the country. The State Bank of India (SBI) also opened the LoC against the main accused in 2019.
The CBI has registered a case against ABG Shipyard Limited and its then Chairman and Managing Director Rishi Kamlesh Agarwal along with others for defrauding a consortium of banks to the tune of over Rs 22,842 crore.
The agency has named then executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia and another company ABG International Pvt Ltd for alleged offenses of criminal conspiracy, cheating, criminal breach of trust and abuse of official position. He said that the Indian Penal Code (IPC) and the Prevention of Corruption Act.
Continuing the investigation, the CBI raided 13 locations on 12 February.
The officials claimed that they have found several incriminating documents, such as books of accounts of the accused borrower company, which are being scrutinised.
The bank had first filed the complaint on November 8, 2019, on which the central probe agency had sought some clarifications on March 12, 2020.
The bank filed a new complaint in August that year. After “investigating” for more than a year and a half, the CBI acted on the complaint, registering an FIR on February 7, 2022.
The company was given a loan facility of Rs 2,468 with SBI from 28 banks and financial institutions led by ICICI Bank.
51 crore, he said.
He said a forensic audit conducted by Ernst & Young revealed that between 2012-17, the accused colluded together and carried out illegal activities, including misappropriation of funds, misappropriation and criminal breach of trust.
This is the biggest bank fraud case ever registered by the CBI. It said the funds were used for purposes other than those issued by the banks. The loan account was declared as a non-performing asset (NPA) in July, 2016 and fraud in 2019.
SBI has said in its complaint that ABG Shipyard Limited (ABGSL) is the flagship company of ABG Group, which is engaged in the business of shipbuilding and ship repair.
ABGSL, being a major player in the Indian shipbuilding industry, operates from shipyards located at Dahej and Surat in Gujarat, with Surat Shipyard having a capacity to build ships up to 18,000 Dead Weight Tonnage (DWT) and 1,20,000 are dead. Weight Tonnage (DWT) at Dahej Shipyard.
The company has built over 165 vessels (including 46 for the export market) over the past 16 years with class approvals from all international classification societies like Newsprint Carriers, Self-discharging and Bulk Cement Carriers, Floating Cranes etc. Special ships included. , American Bureau of Shipping, Bureau Veritas, IRS, DNV, said in the complaint.
“The global crisis has hit the shipping industry due to the fall in demand and prices of commodities and subsequent fall in cargo demand. The cancellation of contracts for some ships and vessels resulted in piles of inventory.
This has resulted in shortfall of working capital and a significant prolongation of the operating cycle, leading to liquidity problems and financial problems,” the complaint said.
SBI said there was no demand for commercial vessels as the industry was going through a slowdown in 2015 as well, which was exacerbated by paucity of defense orders, making it difficult for the company to maintain the repayment schedule.
“The company has been referred by ICICI Bank to NCLT, Ahmedabad for CIRP,” it said.
Read also: ABG Shipyard Bank fraud: SBI claims, there was no delay in registering the case
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