New Delhi: India’s premier anti-corruption agency, the Central Bureau of Investigation, filed a bank fraud case against ABG Shipyard Ltd which is based in Surat in Gujarat for committing a fraud of Rs 22,842 crore ($3.03 billion) to a group of banks, including ICICI Bank, IDBI Bank, State Bank of India, among others.
The First Information Report, which was registered on Monday (February 7), has been registered under the Section 120B, 409 and 420 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act of 1988 on a complained received by the State Bank of India.
When fraud was committed?
After the CBI filing FIR against the company became public, opposition parties, particularly the principal opposition party, the Congress, targeted the government for rising cases of bank fraud during its tenure.
However, according to the information given by the SBI, the bank fraud was committed between April 2012 to July 2017, which overlaps both UPA-2 and the first term of Prime Minister Narendra Modi.
In the written complaint filed by a Deputy General Manager in State Bank of India’s stressed asset management branch-1 in Mumbai in August 2020, the fraud came to the knowledge of the bank following a forensic audit conducted by Ernst & Young which submitted its report in January 2019.
Where was the fraud committed?
In its complaint, the SBI said the fraud was committed at the bank's overseas branch in Mumbai where the accounts of the company were maintained.
The SBI said the fraud was also committed at the commercial finance branch of State Bank of Patiala in New Delhi, and at the commercial branch of State Bank of Travancore. These two associate banks of SBI have been subsequently merged with the SBI.
However, the part of the SBI’s to the CBI written in August 2020 which was included in the FIR, does not contain the details of the places of the fraud with regard to other banks as more than two dozen lenders were involved in lending to the company.
SBI alleges diversion, misappropriation of funds
“The fraud has taken place through diversion of funds, misappropriation, and criminal breach of trust with an objective to gain unlawfully at the cost of Bank's funds,” the SBI had said in its complaint.
Who are the accused?
In the FIR, the CBI has named the company ABG Shipyard Limited as accused number one while its chairman and managing director Rishi Kamlesh Agarwal, who was also a guarantor for the loan, has been named as the accused number two. The company’s executive director Santhanam Muthaswamy, three other directors - Ashwini Kumar, Sushil Kumar Agarwal, Ravi Vimal Nevetia have also been listed as accused in the case in addition to an associate company ABG International Private Limited and unknown public officials and private person.
The SBI said the accused persons and companies caused a loss of Rs 2468.51 crore to the bank.
On the other hand, the CBI had estimated a total loss of Rs 22,842 crore to the consortium of banks, comprising of State Bank of India, erstwhile State Bank of Patiala, erstwhile State Bank of Travancore, ICICI Bank, IDBI Bank, Bank of Baroda, Punjab National Bank, Exim Bank of India, Indian Overseas Bank, Bank of India, Standard Chartered Bank, and Syndicate Bank, among others.
