In a Rs 23,000 crore alleged bank fraud case, lookout circulars have been issued against ABG Shipyard’s CEOs and top personnel. A watch circular is used to prevent somebody wanted by the police from leaving the country through airports or border crossings.
The news: Rishi Agarwal, Santhanam Muthuswamy, and Ashwini Kumar are among the company’s directors. According to reports, this is India’s largest bank loan fraud. As per the Central Bureau of Investigation, or CBI, ABG Shipyard defaulted on loans of Rs 22,842 crore owing to 28 banks, including State Bank of India. If sources are to be believed ABG Shipyard routed funds to at least 98 linked entities.
- The ABG Group’s flagship enterprise, ABG Shipyard, specialises in shipbuilding and ship repair. Gujarat’s shipyards are located in Dahej and Surat.
- The latest alert notice in the ABG Shipyard case joins a lengthy list of comparable cases in the country, ranging from the Punjab National Bank fraud involving businessmen Nirav Modi and his uncle Mehul Choksi to the bank loan default of former Kingfisher Airlines CEO Vijay Mallya. They are all attempting to avoid extradition to India.
What they said: Various banks in the consortium labelled the ABG Shipyard account fraudulent between April 2019 and March 2020. “The fraud is mostly due to ABG Shipyard making large transfers to its linked parties and then creating adjustment entries,” the CBI said in a statement.
- “By diverting bank financing, it was able to make massive investments in its overseas business.” Funds were diverted to buy large assets in the names of the company’s associated parties. The relevant time was 2005-2012, according to the CBI’s review of records and preliminary investigation.
- According to the CBI, state governments’ withholding of “general permission” has made filing bank fraud cases more difficult. “There are approximately 100 high-value bank fraud cases that have been unable to be registered due to state governments’ failure to comply with particular consent… when general consent has been withdrawn,” the CBI said in a statement.
The ABG Shipyard case, however, has little relevance on states withholding “general consent” to the CBI because it was lodged in Delhi, where the CBI has original jurisdiction.