A single event unfolds the most horrifying fraud in the history of Indian banks. ABG shipyard was accused of serious debt of Rs 22,842 crore from 28 banks between the course of 2012 and 2017. The news came into the limelight recently unravelling the biggest scam with Indian banks. Big faces like SBI, ICICI and IDBI are the main financers of ABG shipyard, facing crucial debts.
In 1985 ABG Group incorporated ABG shipyard Ltd as a sister concern company. Rishi Kamlesh Agarwal is the main promoter of this business in Gujrat, now facing accusations and lookout notice against him by CBI.
The company took the initial investment from a consortium of 28 banks to finance the company. With passing years, banks continue to lend and invest despite seeing many red flags in the financial structure of the company. The ABG Shipyard is said to collapse around the global financial crisis in 2008.
If placed in chronological order, in 2014 SBI restructures the financial help to ABG shipyard under CDR also known as corporate debt restructuring. The company was still unable to clear the instalments. At the beginning of 2019, the bank was identified as a fraud by SBI.
According to the first evidence collected by forensic audit states, “Diversion of funds, misappropriation and criminal breach of trust, with an objective to gain unlawfully at the cost of the bank’s funds.”
Recent events led financial minister Nirmala Sitharaman to initiate the enquiry, while in a statement she said, “The loans were issued under the Congress-led UPA regime, the ABG Shipyard’s account became a non-performing asset (NPA) in 2013 and the debt was restructured in 2014 by all lenders but it could not be recused.”
CBI has issued a lookout notice for Rishi Agarwal and ABG executives Ashwini Kumar and Santhanam Muthuswamy.