New Delhi: The Central Bureau of Investigation (CBI) on Wednesday arrested Rishi Kamlesh Agrawal, the chairman and managing director of Surat-based ABG Shipyard, on charges of duping a consortium of 28 banks of Rs 22,842 crores – the largest scam the country has ever seen.
The CBI has also named the then executive director Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia and another company ABG International Pvt Ltd 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
A forensic audit by Ernst and Young has shown that between 2012 and 2017, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust.
The company was sanctioned credit facilities from 28 banks and financial institutions led by ICICI Bank and the SBI. SBI had first filed a complaint on 8 November, 2019.
In its complaint, the SBI said ABG Shipyard Ltd (ABGSL) was the flagship company of the ABG Group which engaged in the business of ship building and ship repair.
The ABGSL, a major player in Indian ship-building industry, operated from shipyards that were located at Dahej and Surat in Gujarat, with a capacity to build vessels up to 18,000 dead weight tonnage (DWT) at the Surat Shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej Shipyard.
The company has built over 165 vessels (including 46 for export market) in the last 16 years, among them specialised vessels like newsprint carriers, self-discharging and loading bulk cement carriers, and floating cranes 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 few ships and vessels resulted in piling up of 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 complaint added.
The SBI said there was no demand for 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 repayment schedule.
“The company has been referred to NCLT, Ahmedabad, by ICICI Bank for CIRP,” it said.