ABG Shipyard Company of Gujarat which was once shipbuilding ‘powerhouse' Mani caste, today known for fraud of Rs. 22,842 crores. Interestingly, when ABG's business was being dubbed in 2012, it was also dubbing SBI, ICICI, IDBI, and 25 different banks with it through loan frauds and scams – the way banks have to. First time 2018- 19. And after complaints, audits, ‘investigation', and CBI investigation, now the fraud of ABG Shipyard has come in front of the world in 2022.
Let me tell you that the fraud amount of ABG Shipyard is about 9,000 crores more than the amount of Nirav Modi and Mehul Choksi and is India's biggest bank fraud to date. Yes, a company from Gujarat, the father of all Indian bank frauds, chose not one but 28 banks from 2012 to 2017. Here comes the ABG Shipyard scam in detail – with a timeline.
Let's see the timeline of the ABG Shipyard Fraud Case
ABG Shipyard has been considered as NPA since November 2013 but due to failed debt restructuring, ABG Shipyard has been declared as NPA in July 2016 but with effect from November 2013 – these That's when the company became deeply indebted.
April 2018 A Joint Lenders Meeting leaders decided to conduct a forensic audit – the task was given to Ernst & Young.
Jan 2019 Ernst & Young had submitted its report and the lenders have decided that SBI will register the complaint as it is one of the largest PSB. SBI registered its complaint with CBI but after 8 months, on 8th November 2019. And from that day onwards this loan account was declared as fraud.
After 4 months. on March 12, 2020, CBI sought further clarifications from SBI… FIR 5 months later, in August 2020 SBI filed a fresh complaint.
The CBI started its investigation and registered its FIR on February 7, 2022, in which they also submitted a forensic audit of Ernst & Young, which described how the company siphoned loan funds between April 2012 and June 2017. – In which the assets were purchased for the parties related to the loan money and how the company also invested the loan funds in its foreign subsidiary. What are the opportunities for forensic audit revelations ABG Shipyard also made substantial adjustment entries?
Let me tell you that when a loan account is labeled as NPA, then there are a lot of relief measures to use – where these are worked out interest rates for them and then their repayment tenure is extended.
According to CBI, ICICI has been selected as 7,089 crores, IDBI 3639 crore, SBI 2925 crore, Bank of Baroda 1614, Exim Bank of India 1327, PNB Bank of 1244, and Indian Overseas Bank of India 1228 – Apart from this, there are 20 more banks such as Bank of India, Central Bank, Indian Bank, State Bank of India Singapore, Lakshmi Vilas, Punjab Sind Bank, IFCI, DCB, SBM, and all other banks. Unfortunately, LIC has also cost 136 crore ABG Shipyard.
So who benefited from this scam?
Of course, Rishi Agarwal, the owner and MD of ABG Shipyard, and along with him, the directors of the company – Ashwini Kumar, Sushil Kumar Agarwal, Ravi Vimal Nevetia, Santhanam and his second company, ABG International Pvt Ltd.
The CBI has currently retained Rishi Aggarwal and the directors and has also leveled several charges against them such as criminal conspiracy, cheating, criminal breach of trust, and abuse of official position under the IPC and the Prevention of Corruption Act.
Let me tell you that ABG Shipyard is the same company which was started in 1985 and from 1990 to 2012, Company has also built 165 Vessels in.
Now what? How will the banks get their money back?
All the small and big bank frauds happen on a daily basis, many times on a daily basis, ABG Shipyard came in front of our eyes because it is a very big money heist.
Let me tell you that according to statistics, in FY 2021 India 229 bank frauds took place and 83,638 criminal cases were also registered and a total fraud of Rs 1.38 lakh crore took place. Sadly, only up to Rs 1,000 crore has been recovered so far. Think, where is 1 lakh crore and where are 1,000 crores from.
Now it is a matter of thinking that how will the bank get its 22,000 crores back at the recovery rate? In the earlier case also we have not seen any significant development till now.
Unfortunately, due to which bank frauds are rampant in India, sometimes it seems that now ‘scam' and ‘fraud' have become a part of the system itself – the last can happen without the connivance of the bank official. Big fraud?
What do you think – will the bank be able to recover its 22,000 crores? Tell us in the comment section.