CBI issues lookout notice against ABG Shipyard directors in Rs 23,000 crore bank fraud case

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The Central Bureau of Investigation (CBI) said on February 15 that it has issued lookout notices against Rishi Agarwal and other directors of ABG Shipyard in connection with the Rs 23,000-crore bank fraud case, to make sure they do not leave the country while the case is probed.

News agency ANI quoted a senior CBI official as saying: “The Lookout Circulars (LOCs) were issued against the directors of ABG Shipyard in the Rs 22,842 crore bank loan fraud case.”

According to the Central Bureau of Investigation, a forensic audit report it received from the banks two years ago had found instances of fraud in April 2012 and July 2017.

In its biggest bank fraud case, the CBI had on February 12 booked ABG Shipyard Ltd and its former chairman and managing director (CMD) Rishi Kamlesh Agarwal along with others for allegedly cheating a consortium of banks led by the State Bank of India (SBI) of over Rs 22,842 crore.

According to figures from the forensic audit that were included in the CBI complaint, the company owed Rs 70.89 billion to ICICI Bank, Rs 36.34 billion to IDBI Bank, Rs 29.25 billion to the State Bank of India, Rs 16.14 billion to the Bank of Baroda, Rs 12.44 billion to Punjab National Bank, and Rs 12.28 billion to the Indian Overseas Bank.

Besides Agarwal, the probing agency has also named Santhanam Muthaswamy -- the then executive director of the company, along with directors Ashwini Kumar, Sushil Kumar Agarwal, and Ravi Vimal Nevetia. Another company named ABG International Pvt Ltd has been booked by the CBI too for 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.

The bank had first filed a complaint against ABG Shipyard on November 8, 2019, on which the CBI had sought some clarifications on March 12, 2020. A fresh plaint was filed later in August 2019, following which the CBI filed an FIR on February 7, 2022, after through scrutinising for more than one and a half years.

ABG Shipyard was sanctioned credit facilities from 28 banks and financial institutions with the SBI having exposure of Rs 24,68.51 crore. The forensic audit has shown that between 2012-17, the accused colluded together and committed illegal activities including diversion of funds, misappropriation, and criminal breach of trust. In short, the funds were used for purposes other than that for which they were released by the banks.

The loan account was declared a non-performing asset (NPA) in July 2016 and a fraud in 2019. However, Finance Minister Nirmala Sitharaman said on February 14 that the loans given to ABG Shipyard had turned into NPAs prior to 2014, that is, before the Bharatiya Janata Party (BJP) government had been voted to power in the Centre.

Sitharaman said that the ABG Shipyard account turned NPA during the erstwhile UPA regime and the banks took lesser than normal time to detect the fraud perpetrated by the shipping firm. "...in this particular case with that kind of a measurement, actually, I should say to the credit to the banks, they've taken lesser than what is normally an average time to detect these kinds of frauds," she said at a press conference after addressing the members of the RBI board."

(With PTI inputs)