A major Gujarat-based shipbuilding company and its directors have been booked by CBI for fraudulent loan default to the tune of Rs 22,842 crore, making it one of the biggest loan fraud cases the agency is probing.
The agency has booked ABG Shipyard Ltd (ABGSL) and its former chairman and managing director, Rishi Kamlesh Agarwal, along with then executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia.
Another company, ABG International Pvt Ltd, has also been booked in the case for alleged offenses of criminal conspiracy, cheating, criminal breach of trust and abuse of official position under IPC and Prevention of Corruption Act.
ABG Shipyard is alleged to have diverted loan funds through subsidiaries in Singapore and through other means between 2012 and 2017. The loan was declared NPA in July 2016, and the company is already facing proceedings in the National Company Law Tribunal (NCLT).
The FIR has been registered on the basis of a 2019 complaint from the State Bank of India, one of the lenders.
The CBI, which registered the case on February 7, carried out searches at 13 locations in premises of the accused on Saturday. These include premises linked with ABGSL and its directors in Surat, Bharuch, Mumbai and Pune, among other places. “It was alleged that the accused had cheated the consortium of 28 banks, including branches of erstwhile State Bank of Patiala, Commercial Finance Branch, New Delhi; erstwhile State Bank of Travancore, Commercial Branch, New Delhi; State Bank of India, Overseas Branch, Mumbai etc. The consortium of 28 banks was led by ICICI Bank,” CBI said in a statement.
According to CBI, the Surat-based company was engaged in shipbuilding and ship repair.
“It was alleged that the accused had colluded and committed activities by way of diversion of funds for the purpose other than for which the funds were released by the bank,” the agency stated. “Huge amounts were allegedly transferred by the said company to its related parties and adjustment entries were made.”
“It was alleged that bank loans to the said private company was diverted and huge investment was found to be made in the overseas subsidiary. It was alleged that funds from banks were diverted to purchase assets in the name of related parties,” it stated.
According to CBI, the ABG Group, which owns ABGSL, is a major player in the Indian shipbuilding industry. ABGSL’s shipyards are located at Dahej and Surat in Gujarat, and the company has capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat Shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej Shipyard, it stated. ABGSL has constructed over 165 vessels, including 46 for export market, in the last 16 years. These include specialized vessels such as newsprint carriers, self-discharging and loading bulk cement carriers, floating cranes, dynamic positioning diving support vessels and flotilla for leading companies in India and abroad.