Dubbing it as the country's biggest bank-fraud case, the Congress questioned the Narendra Modi government on Sunday why it took five years after the liquidation proceedings of ABG Shipyard to lodge an FIR in connection with the alleged duping of 28 banks. The CBI has booked ABG Shipyard Limited, its former chairman and managing director Rishi Kamlesh Agarwal and others for allegedly cheating a consortium of banks led by the State Bank of India (SBI) of over Rs 22,842 crore.
"Why did it take five years after the liquidation proceedings of ABG Shipyard to lodge even an FIR for duping 28 banks of Rs 22,842 crore?" Congress general secretary Randeep Singh Surjewala asked at a press conference here. "Why did the Modi government refuse to take note of the allegations made on February 15, 2018 by the Congress, warning of a scam in ABG Shipyard, and why no FIR was lodged and criminal action taken despite their accounts having been declared as fraud on June 19, 2019?" he asked.
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Surjewala said the SBI wrote to the CBI in November 2018, "saying there was a fraud committed by ABG Shipyard and seeking the registration of an FIR and criminal action. Despite this, nothing happened and the CBI pushed the files back to the SBI. Public money keeps getting swindled, but no FIR is lodged". On August 25, 2020, the SBI filed a second complaint with the CBI, saying "please register an FIR as this is a case of cheating and fraud. But the CBI still does not act. It waits for another year and a half. Finally, now, after five years, this FIR has been registered", he added.
"The complicity, the collusion and the connivance of those sitting in the highest echelons of the Modi government with bank fraudsters is writ large," the Congress leader alleged. He said it was the "biggest bank fraud" witnessed by the country.
Surjewala said there seems to be a "loot-and-escape" scheme for bank fraudsters while pointing out many instances in the past and adding that the accused in these cases are now in foreign shores. He alleged that "these indelible facts reflect the gross mismanagement of the banking system, holding the banking system captive to fraudsters and the initiation of the loot-and-escape flagship scheme for bank fraudsters".
"Over the last seven-and-a-half years of the Modi government, incidents of bank fraud involving a total amount of Rs 5.35 lakh crore have been reported. During this period, the write-offs by the banks in India is Rs 8.17 lakh crore. "Bank NPAs amounted to Rs 21 lakh crore between 2014 and 2021. That is the state of gross mismanagement of people's money, which is lying in the banking system," the Congress leader said, adding, "India woke up to the rude shock of the biggest ever bank fraud in the last 75 years involving Rs 22,842 crore."
He claimed that ABG Shipyard was allotted 1.21 lakh square metres of land in 2007 by the Bharatiya Janata Party (BJP) government in Gujarat. "The comptroller and auditor general had indicted the then Gujarat government for undue favours to ABG Shipyard and Rishi Agarwal over allotting land at Rs 700 per square metre, while the price of the land was 100 per cent higher, that is Rs 1,400 per square metre," Surjewala said.
He said the then Gujarat government proceeded to allot 50 hectares of land to ABG Shipyard in Dahej. The SBI had first filed a complaint on November 8, 2019 on which the CBI had sought some clarifications on March 12, 2020.
The bank filed a fresh complaint in August 2020. After "scrutinising" the complaint for a year and and a half, the CBI acted on the complaint, filing an FIR on February 7 this year. In its complaint, the SBI said ABG Shipyard Limited (ABGSL) is the flagship company of the ABG Group, which is engaged in the business of ship building and ship repair.
Reacting on the recent development, SBI said, "ABG Shipyard was incorporated on 15 March 1985, has been banking arrangements since 2001. Financed under Consortium arrangement over a two dozen lenders. The leader in Consortium was ICICI Bank. Due to poor performance, the account became NPA on 30/11/2013. Several efforts were made to revive the company operations but could not succeed."
The nationalised bank added, " The account was restructured under the CDR mechanism in March 2014 by all lenders. However, as the shipping industry was going through a downturn, one of the worst ever seen, the operations of the company could not revive.As the restructuring failed, the account was classified as NPA in July 2016 with backdated effect from 30th Nov. 2013. E&Y was appointed as Forensic Auditor by lenders during April 2018 and they submitted their report on January 19. E&Y report was placed before the Fraud Identification Committee of 18 Lenders in 2019. Fraud is mainly attributed to diversion of funds, misappropriation, and criminal breach of trust."
Furthermore, the SBI said that ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI being the largest PSB lender, lodges the complaint with CBI. The first complaint was filed with CBI in Nov 2019. There was a continuous engagement between CBI and Banks and further information was getting exchanged, it added."
"The circumstances of the fraud, as well as CBI requirements, were further deliberated in the various meetings of Joint Lenders and a fresh and comprehensive second complaint was filed in Dec. 2020. The account is presently undergoing liquidation under an NCLT driven process.A fraud is declared basis the Forensic Audit report findings that are discussed thoroughly in joint lenders meetings. Typically when fraud is declared, an initial complaint is preferred with CBI, and based on their enquiries further information is gathered. In a few cases, when substantial additional information is gathered, a second compliant incorporating full and complete details is filed which forms the basis for the FIR. At no point in time, there was any effort to delay the process. The lender's forum diligently follows through with CBI in all such cases," SBI said in a statement."