Tag: Rishi Kamlesh Agarwal

  • CBI arrests ABG Shipyard founder Rishi Agarwal in Rs 22,842 crore bank fraud caseĀ 

    By PTI

    NEW DELHI: The CBI on Wednesday arrested Rishi Kamlesh Agarwal, the founder of ABG Shipyard Limited, in connection with an alleged bank fraud of more than Rs 22,842 crore, officials said.

    The Central Bureau of Investigation (CBI) had booked Agarwal, a former chairman of the company, the then executive director Santhanam Muthaswamy, and directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia on February 7.

    Agarwal was called for questioning on Wednesday at the CBI headquarters during which the investigating officer suspected that he was not co-operating in the probe and was evasive in responses following which he was arrested, the officials said.

    The CBI had registered the case on a complaint from the State Bank of India for the 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, they said.

    The SBI with an exposure of Rs 2,468.51 crore was part of a consortium of 28 banks and financial institutions led by ICICI Bank, the officials said.

    The ABG Shipyard being a major player in Indian ship building industry operated from its shipyards located at Dahej and Surat in Gujarat with capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej shipyard.

    The company, which had witnessed phenomenal rise having constructed 165 vessels in 16 years, started showing stress following global slump in the shipping industry bringing irregularities in repayment schedule.

    “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 from the SBI, now part of the FIR, has said.

    In its complaint, the SBI said there was no demand of commercial vessels because of downturn in the industry even in 2015, which was further aggravated due to lack of defence orders making it difficult for the company to maintain repayment schedule.

    Once the loan accounts were declared non-performing assets in July 2016, a forensic audit was ordered by the lender banks.

    The audit by Ernst and Young showed that between 2012 and 2017, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust, the officials said.

    Funds were used for purposes other than for which they were released by banks, they said, adding that the company has been “referred to NCLT, Ahmedabad, by ICICI Bank for Corporate Insolvency Resolution Process (CIRP)”.

    The bank had first filed a complaint on November 8, 2019 on which the CBI had sought some clarifications on March 12, 2020.

    It filed a fresh complaint in August that year.

    After “scrutinising” for over one-and-a-half years, the CBI acted on the complaint filing an FIR on February 7.

    NEW DELHI: The CBI on Wednesday arrested Rishi Kamlesh Agarwal, the founder of ABG Shipyard Limited, in connection with an alleged bank fraud of more than Rs 22,842 crore, officials said.

    The Central Bureau of Investigation (CBI) had booked Agarwal, a former chairman of the company, the then executive director Santhanam Muthaswamy, and directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia on February 7.

    Agarwal was called for questioning on Wednesday at the CBI headquarters during which the investigating officer suspected that he was not co-operating in the probe and was evasive in responses following which he was arrested, the officials said.

    The CBI had registered the case on a complaint from the State Bank of India for the 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, they said.

    The SBI with an exposure of Rs 2,468.51 crore was part of a consortium of 28 banks and financial institutions led by ICICI Bank, the officials said.

    The ABG Shipyard being a major player in Indian ship building industry operated from its shipyards located at Dahej and Surat in Gujarat with capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej shipyard.

    The company, which had witnessed phenomenal rise having constructed 165 vessels in 16 years, started showing stress following global slump in the shipping industry bringing irregularities in repayment schedule.

    “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 from the SBI, now part of the FIR, has said.

    In its complaint, the SBI said there was no demand of commercial vessels because of downturn in the industry even in 2015, which was further aggravated due to lack of defence orders making it difficult for the company to maintain repayment schedule.

    Once the loan accounts were declared non-performing assets in July 2016, a forensic audit was ordered by the lender banks.

    The audit by Ernst and Young showed that between 2012 and 2017, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust, the officials said.

    Funds were used for purposes other than for which they were released by banks, they said, adding that the company has been “referred to NCLT, Ahmedabad, by ICICI Bank for Corporate Insolvency Resolution Process (CIRP)”.

    The bank had first filed a complaint on November 8, 2019 on which the CBI had sought some clarifications on March 12, 2020.

    It filed a fresh complaint in August that year.

    After “scrutinising” for over one-and-a-half years, the CBI acted on the complaint filing an FIR on February 7.

  • ABG Shipyard fraud: SBI says no delay in filing of case

    By PTI

    NEW DELHI: Amid allegations of delay in filing of complaint against the country’s biggest bank fraud totaling Rs 22,842 crore, State Bank of India (SBI) on Sunday said it has been diligently following the ABG Shipyard fraud case with the CBI following the forensic audit report.

    The Central Bureau of Investigation (CBI) recently booked ABG Shipyard Limited, its former chairman and managing director Rishi Kamlesh Agarwal and others for allegedly cheating a consortium of two dozen lenders led by ICICI Bank.

    ABG Shipyard fraud is much higher than the one perpetrated by Nirav Modi and his uncle Mehul Choksi, who allegedly cheated the Punjab National Bank (PNB) of around Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

    Congress general secretary Randeep Singh Surjewala while addressing a press conference wondered as to why did it take five years after the liquidation proceedings of ABG Shipyard to lodge even an FIR for duping 28 banks of Rs 22,842 crore.

    “Why did the Modi government refuse to take note of the allegations made on February 15, 2018, by the Congress, warning of a scam in ABG Shipyard, and why no FIR was lodged and criminal action taken despite their accounts having been declared as fraud on June 19, 2019?” he asked.

    Responding to the allegation, SBI in a statement said a fraud is declared basis the forensic audit report findings that are discussed thoroughly in joint lenders meetings and when a fraud is declared, an initial complaint is preferred with the CBI and based on their enquiries further information is gathered.

    “In a few cases, when substantial additional information is gathered, a second complaint incorporating full and complete details is filed which forms basis for the FIR. At no point in time, there was any effort to delay the process. The lenders forum diligently follows through with CBI in all such cases,” it said.

    Surjewala said SBI wrote to the CBI in November 2018, “Saying there was a fraud committed by ABG Shipyard and seeking the registration of an FIR and criminal action. Despite this, nothing happened and the CBI pushed the files back to the SBI.”

    Sharing the timeline of events, the statement said the loan, given by a consortium of lenders led by ICICI Bank, turned NPA on November 30, 2013.

    Several efforts were made to revive the company operations but could not succeed, it said, adding the account was restructured under CDR mechanism in March 2014 by all lenders but it could not be recused.

    “As the restructuring failed, account classified as NPA (non-performing asset) in July 2016 with back dated effect from November 30, 2013. E&Y were appointed as forensic auditor by lenders during April 2018 and they submitted their report in January 2019. E&Y report was placed before the Fraud Identification Committee of 18 lenders in 2019. Fraud is mainly attributed to diversion of funds, misappropriation and criminal breach of trust,” it said.

    Although, ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI being the largest public sector bank, lodges the complaint with CBI, it said.

    “The first complaint was filed with CBI in November 2019. There was continuous engagement between CBI and Banks and further information was getting exchanged,” it said.

    The circumstances of the fraud as well as CBI requirements were further deliberated in the various meetings of Joint Lenders and a fresh and comprehensive second complaint was filed in December 2020, it said. The account is presently undergoing liquidation under a NCLT-driven process.

    The Forensic Audit has shown that between 2012-17, the accused colluded together and committed illegal activities including diversion of funds, misappropriation and criminal breach of trust.