ABG Shipyard Limited, which is a part of India’s ABG Group of companies and is indulged in shipbuilding operations in Gujarat’s Surat and Dahej has been booked by the country’s Central Bureau of Investigation (CBI) for an alleged bank fraud of INR 228.42 billion, or 22,842 crore rupees, which translates to approximately USD $3.03 billion, which is building up to be the nation’s biggest bank fraud till date.
Rishi Kamlesh Agarwal, the former chairman and managing director of ABG Shipyard along with others, namely the former executive director Santhanam Muthaswamy, directors Sushil Kumar Agarwal, Ashwini Kumar and Ravi Vimal Nevetia will now be investigated for cheating a consortium of banks led by the State Bank of India (SBI). Further, another company of the ABG Group, named ABG International Pvt Ltd. is also been named in the alleged bank fraud and have been booked for alleged offences of criminal conspiracy, cheating, criminal breach of trust and the abuse of official position under the Indian Penal Code (IPC) and the country’s Prevention of Corruption Act.
Being a major shipbuilder in the Indian subcontinent, ABG Shipyard also operates a ship repairing facility in the Union Territory of Goa, which happens to be the country’s largest ship maintenance facility. ABG Shipyard builds vessels with a capacity of up-to 18,000 DWT (at its Surat unit), all the way to a capacity of up-to 1,20,000 DWT at its shipyard in Dahej.
Till now, the shipyard has built at-least 165 vessels in the last 16 years, which primarily include self-discharging and loading cement bulk carriers, floating cranes and more. Specialized ships like newsprint carriers (vessels used for the transport of paper cargo) have also been constructed by ABG Shipyard in the past, with international class approvals.
A complaint, which was filed by SBI mentioned, “Global crisis has impacted the shipping industry due to fall in commodity demand and prices and subsequent fall in cargo demand. The cancellation of contracts for a few ships and vessels resulted in piling up inventory. This has resulted in a paucity of working capital and caused a significant increase in the operating cycle. thereby aggravating the liquidity problem and financial problem.”
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The CBI, in a statement said, “Searches were conducted on Saturday at 13 locations in the premises of accused including private company, directors at Surat, Bharuch, Mumbai, Pune etc which led to recovery of incriminating documents.”
A CBI complaint which was filed on Sunday mentioned that fraud took its shape in the form of diversion of funds, ‘misappropriation and criminal breach of trust with an objective to gain unlawfully at the cost of the Bank’s funds’.
“The money was used for purposes other than the purpose for which the funds were released by the Bank,” added CBI.