No effort to delay ABG Shipyard investigation by lenders, says SBI

On Friday, CBI booked the firm, its former CMD and others for allegedly cheating a consortium of banks for over Rs 22,842 crore, touted as the biggest fraud in Indian banking history

With controversy breaking out over delay in filing the first information report (FIR) by Central Bureau of Investigation (CBI) against ABG Shipyard, State Bank of India (SBI) has clarified that banks were not responsible for the delay.

The loans to the troubled shipbuilder were extended by over a consortium of two dozen lenders, led by ICICI Bank which turned non-performing in November 2013, following which the loans were restructured under Corporate Debt Restructuring (CDR) scheme in 2014. “However, as the shipping industry was going through a downturn, one of the worst ever seen, the operations of the company could not revive,” State Bank of India said in a statement on Sunday.

As the restructuring failed, the account was classified as NPA in July 2016 with backdated effect from 30th Nov. 2013. E&Y was appointed as Forensic Auditor by lenders during April 2018 and they submitted their report in January 2019. E&Y report was placed before the Fraud Identification Committee of 18 Lenders in 2019. Fraud was mainly attributed to diversion of funds, misappropriation, and criminal breach of trust.

“Although, ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI being the largest PSB lender, lodges the complaint with CBI. The first complaint was filed with CBI in Nov 2019. There was a continuous engagement between CBI and Banks and further information was getting exchanged,” SBI said.

On Friday, the CBI booked ABG Shipyard Ltd and its former chairman and managing director Rishi Kamlesh Agarwal along with others for allegedly cheating a consortium of banks for over Rs 22,842 crore – touted as the biggest fraud in the Indian banking history.

Besides Agarwal, the investigating 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 IPC and the Prevention of Corruption Act, media reports said.

SBI said that the circumstances of the fraud, as well as CBI requirements, were further deliberated in the various meetings of Joint Lenders and a fresh and comprehensive second complaint was filed in December. 2020. The account is presently undergoing liquidation under an NCLT driven process.

“At no point in time, there was any effort to delay the process.  The lender's forum diligently follows through with CBI in all such cases,” SBI said.

The lender said typically when fraud is declared, an initial complaint is preferred with CBI, and based on their enquiries further information is gathered. In a few cases, when substantial additional information is gathered, a second complaint incorporating full and complete details is filed which forms the basis for the FIR.

The Congress party questioned the Narendra Modi government as this massive scam broke out following CBI booking ABG Shipyard and its former CMD.

At a press conference in Chandigarh Congress general secretary Randeep Singh Surjewala asked why the government refused to take note of allegations made on February 15, 2018 by Congress which warned of a scam.

“Why did it take five years after the liquidation proceedings of ABG Shipyard to lodge even an FIR for duping 28 banks of Rs 22,842 crore?”, news agency PTI said while quoting Surjewala.