CBI Arrests ABG Shipyards Chairman Rishi Agrawal In Rs 22,842 Crore Bank Fraud

CBI Arrests ABG Shipyards Chairman Rishi Agrawal In Rs 22,842 Crore Bank Fraud

By Ashita Singh
Updated: Wed, 21 Sep 2022 06:50 PM IST
Minute Read
CBI Arrests ABG Shipyards Chairman Rishi Agrawal In Rs 22,842 Crore Bank Fraud

The Central Bureau of Investigation, CBI on Wednesday arrested Rishi Kamlesh Agrawal Chairman and Managing Director of Surat-based ABG Shipyard on charges of duping a consortium of 28 banks of Rs 22,842 crores of bank fraud.

The Central Bureau of Investigation (CBI) had booked Agarwal, a former chairman of the company, and others for the alleged offences of criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the Indian Penal Code (IPC) and the Prevention of Corruption Act, CBI officials said.

Earlier, the Surat based company was sanctioned credit facilities from 28 banks and financial institutions led by the ICICI Bank, with the State Bank of India (SBI) having an exposure of Rs 2,468.51 crore, the officials said.

A forensic audit by Ernst and Young has shown that between 2012 and 2017, the accused colluded with each other and committed illegal activities, including diversion and misappropriation of funds and criminal breach of trust.

The funds were used for purposes other than for which they were released by the banks, the officials said. The loan account was declared a non-performing asset (NPA) in July 2016 and a fraud in 2019.

In its complaint, the SBI had said ABG Shipyard Ltd (ABGSL) is the flagship company of the ABG Group which engaged in the business of shipbuilding and ship-repair.

The ABGSL, being a major player in Indian shipbuilding industry, operates from shipyards that are located at Dahej and Surat in Gujarat, with a 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.

The company has constructed over 165 vessels, including 46 for export market, in the last 16 years, including specialised vessels like the newsprint carriers, self-discharging, and loading bulk cement carriers, floating cranes etc with class approval of all international classification societies like Lloyds, American Bureau of Shipping, Bureau Veritas, IRS, DNV, the complaint said.

"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 paucity of working capital and caused significant increase in the operating cycle, thereby aggravating the liquidity problem and financial problem," the SBI complaint said.

It added there was no demand of commercial vessels as the industry was going through a downturn even in 2015 which was further aggravated due to lack of defence orders, making it difficult for the company to maintain re-payment schedule.

(With Agencies Inputs)

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