With regards to the ongoing ABG Shipyard issue, the State Bank of India (SBI) has clarified in its statement that there was absolutely no effort to delay the dues recovery process from the promoters of the now-bankrupt ABG Shipyard Ltd.
Notably, the Central Bureau of Investigation (CBI) has booked many top executives of the firm, including ex-chairman Rishi Kamlesh Agrawal and director Santhanam Muthuswamy in a bank fraud case worth Rs 22,483 crores.
It has been alleged that the company, through its directors, undertook a loan of Rs 2,925 crore from the SBI and willingly didn't pay. Additionally, loans taken from over 2 dozen other banks were also never repaid.
With ICICI bank being the consortium leader and IDBI bank in tow as the second lead, the formal complaint to CBI was lodged by the State Bank of India, given that it was the largest public service bank serving as a lender in the group.
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Detailing the events, SBI in a statement said, “ABG Shipyard was incorporated on March 15, 1985, has been banking arrangements since 2001. 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. Despite an attempt to restructure their account under the CDR mechanism in March 2014, the company operations could not revive since the shipping industry at large was witnessing a severe downturn".
Consequently, SBI noted, “As the restructuring failed, the account was classified as NPA in July 2016 with backdated effect from November 30, 2013. Lenders appointed E&Y as forensic auditor in April 2018, with the consulting behemoth submitting its report before the Fraud Identification Committee constituting 18 lenders in 2019."
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It was then, in November 2019, that the first complaint was filed with the CBI. In its statement, SBI further detailed that "fraud is mainly attributed to diversion of funds, misappropriation, and criminal breach of trust."
"There was a continuous engagement between CBI and Banks and further information was getting exchanged. 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 December 2020. The account is presently undergoing liquidation under an NCLT driven process,” it said.
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Reportedly, fraud declarations take place on the basis the forensic audit report findings, which is further deliberated upon by the lenders in joint meetings.
Elaborating on the same, the statement detailed that "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 complaint 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".
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