New Delhi: Almost a week after the Central Bureau of Investigation (CBI) booked ABG Shipyard, a shipbuilding and repair company, the agency on Tuesday issued lookout notices (LOC) against Rishi Agarwal and other directors of the company to make sure they do not leave the country while the case is under probe.
A senior CBI official said that the accused have been located in India.
The agency, on February 7, registered the country’s biggest bank fraud case against the company and its directors Rishi Agarwal, Santhanam Muthuswamy, and Ashwini Kumar.
As per the CBI, ABG Shipyard Ltd has been in business with SBI since 2001.
The officials said that the account of ABG Shipyard turned NPA on November 30, 2013, and according to bank complaint, the NPA is to the tune of Rs 22,842 crore and the majority of the disbursement happened between 2005 and 2012 by a consortium of 28 banks led by ICICI Bank and including SBI.
The official said that the account was restructured under the CDR mechanism on March 27, 2014. However, the operations of the company could not be revived.
On September 10, 2014, N V Dand and Associates was deputed to conduct a stock audit of ABG Shipyard Ltd.
“The Audit Firm submitted its report on April 30, 2016, and observed various faults on the part of the accused company.
“The account of ABG Shipyard Ltd was declared NPA on July 30, 2016, with effect from November 30, 2013,” the official said.
He said that in keeping with a policy implemented since 2014 of red-flagging suspect accounts, commissioning forensic audits by impaneled forensic auditors, and making CMDs liable, a forensic audit was initiated based on the lenders’ decision in the Joint Lenders Meeting on April 10, 2018, and Ernst & Young LLP was appointed Forensic Auditor.
“The forensic audit of ABG Shipyard Ltd, therefore, covers the period from 2012 to 2017. Meanwhile, the company M/s ABGSL was also referred to NCLT, Ahmedabad on 1.8.2017 by ICICI Bank, being a lead bank, for Corporate Insolvency Resolution Process(CIRP),” he said.
The CBI official also said that between April 2019 to March 2020, various banks of the consortium declared the account of ABG Shipyard as fraud.
The fraud is primarily on account of a huge transfer by ABG Shipyard Ltd to its related parties and subsequently making adjustment entries.
“It is also alleged that huge investments were made in its overseas subsidiary by diverting the bank loans and funds were diverted to purchase huge assets in the name of its related parties. During the perusal of records and initial investigation, it is seen that the critical period was 2005-2012,” the official said.
The official shared that the SBI made a complaint to CBI on August 25, 2020, after it raised queries in the complaint made in 2019 to look into the matter of the bank fraud made by ABG Shipyard Ltd and its Directors.
In the instant case, there are 28 banks involved in a consortium with a huge amount of disbursement. There were different nature of bank loans including CC Loan, Term Loan, Letter of Credit, Bank Guarantee, etc. that were given as advance by the banks.
Citing the reason for the delay in filing the case, the official said that it may also be mentioned that the withdrawal of general consent to CBI Investigation by certain states has made the registration of bank fraud cases more challenging.
He said that there are around 100 high value bank fraud cases that could not be registered due to non- accordance of specific consent under section 6 of the DSPE Act by state governments where the general consent has been withdrawn.
The CBI had carried out searches at 13 locations recently and recovered several incriminating documents related to the bank fraud.