SBI on ABG shipyard bank fraud case
New Delhi: While the Central Bureau of Investigation (CBI) has registered an FIR against ABG Shipyard Ltd and its directors for allegedly defrauding a consortium of 28 banks out of Rs 22,842 crore, the State Bank of India (SBI) said on Sunday that the “account is currently being liquidated in a process led by NCLT”, adding “at no time has any effort been made to delay the process”.
The SBI said the lenders’ forum follows the CBI assiduously in all such cases.
“Fraud is declared based on the findings of the forensic audit report which is thoroughly discussed at joint lender meetings. Typically, when fraud is reported, an initial complaint is preferred to the CBI and, based on their requests, additional information is gathered,” the SBI said in a statement.
“In a few instances, where substantial additional information is gathered, a second complaint containing full and complete details is filed, which forms the basis of the FIR,” the statement added.
The SBI said ABG Shipyard, which was incorporated on March 15, 1985, has been under banking since 2001.
“Funded under a consortium agreement with around 20 lenders. The leader of the consortium was ICICI Bank. Due to poor performance, the account became NPA on 11/30/2013. Several efforts were made to restart the company’s operations but were unsuccessful,” the statement added.
The statement further states that although ICICI Bank is the largest lender to the consortium and IDBI the second largest, it was preferred that SBI, the PSB’s largest lender, file the complaint with the CBI.
“The first complaint was filed with the CBI in November 2019. There was continued engagement between the CBI and the banks and further information was being exchanged,” the statement added.
The SBI said the account was restructured under the CDR mechanism in March 2014 by all lenders.
“However, as the shipping industry went through a downturn, one of the worst ever, the company’s operations could not survive,” the statement added.
The SBI further stated that as the restructuring failed, the account was classified as NPA in July 2016 with retroactive effect from November 2013.
“E&Y was appointed as forensic auditor by the lenders in April 2018 and they submitted their report on January 19. E&Y’s report was submitted to the fraud identification committee of 18 lenders in 2019,” the statement said.
“The fraud is primarily attributed to embezzlement, embezzlement and criminal breach of trust,” the statement added.