New Delhi, Nov 19 The Central Bureau of Investigation (CBI) on Saturday filed first charge sheet against 25 accused in connection with the 22,842 crore fraud, allegedly committed by ABG Shipyard company.
The CBI in its probe has established the transactions of Rs 5,000 crore made through various channels.
In the case, there are 28 banks involved in consortium with 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.
The fraud is primarily on account of huge transfer by ABG Shipyard Ltd (ABGSL) 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.
"They took loan of Rs 1228 crore from Indian Overseas Bank, Rs 1244 crore from Punjab National Bank, Rs 1614 crore from Bank of Baroda, Rs 7089 crore from ICICI Bank and Rs 3634 crore from IDBI Bank. Later they didn't pay the bank their dues. Initially the bank initiated an internal inquiry in which it was found that the company was cheating the consortium of banks by diverting funds to different entities," said the CBI.
The CBI official said that ABG Shipyard Ltd has been in business with SBI since 2001. The account of ABG Shipyard turned NPA on November 30, 2013. As per 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, including SBI.
The account was restructured under 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 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. Subsequently, the account of ABG Shipyard Ltd was declared NPA.
In keeping with a policy implemented since 2014 of red-flagging suspect accounts, commissioning forensic audits by empanelled forensic auditors, and making CMDs liable, a forensic audit was initiated based on the lenders' decision in the Joint Lenders Meeting dated April 10, 2018.
Ernst & Young LLP was appointed forensic auditor. As per the usual practice, these forensic audits cover a period starting approximately three to four years prior to the date of declaration of NPA, which, in this case was 2016.
The forensic audit of ABG Shipyard Ltd therefore covers the period from 2012 to 2017. Meanwhile, the company ABGSL was also referred to NCLT, Ahmedabad on August 1, 2017 by ICICI Bank, being lead bank, for Corporate Insolvency Resolution Process (CIRP).
In between April 2019 and March 2020, various banks of the consortium declared the account of ABG Shipyard as fraud.
The CBI is investigating this biggest fraud committed by any company so far.
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