The modern Harshad Mehta, who trumped up Vijay Mallya and Nirav Modi, successfully got away with India’s biggest bank scam worth 23,000 Cr. The details of the scam made public by the CBI are shocking.
ABG Shipyard Ltd (ABG SL), a Gujarat-based company led by Rishi Agarwal, allegedly cheated banks of Rs 22,842 crore between 2012 and 2017. The Narendra Modi administration has received criticism as a result of India’s Biggest Bank Scam, with the Opposition Congress blaming it for assisting in the scam, considering that the ABG Shipyard scam happened in a BJP-ruled state.
The extent and complexity of the ABG Shipyard Scam allegations of India’s Biggest Bank Scam are startling, but the essence of the deceit, as the CBI is uncovering, was the creative technique in which the business purportedly established a network of transactions to defraud a coalition of 28 banks, including State Bank of India (SBI), IDBI, and ICICI.
About ABG Shipyard Ltd.
ABGSL is a publicly-traded shipbuilding and repair firm situated in Surat that was founded in 1985. It is managed by the ABG Group of Companies, which is headed by Rishi Agarwal and has a diverse range of businesses. Commercial boats, split barges, mobile cranes, and cargo ships, to mention a few, were among the products offered by the firm, which has shipyards in Surat and Dahej. It had a total order sheet of 16,600 crores at its height.
What Does ABG Shipyard Do, And Who Owns It?
ABG Shipyard Limited is a shipbuilding enterprise in the corporate sector. Bulk carriers, decking barges, intercept ships, container ships, supply ships, dive support ships, tugs, and other offshore vessels are all manufactured by the organisation. In India, the organisation serves both government and commercial clientele.
The business grew quickly, and it began making acquisitions along the road. It bought Western India Shipyard Ltd, a large ship repair facility in Goa, in 2010. ABGSL even had official approval to construct Navy-related equipment, such as battleships.
It was a booming company till the end of 2012-13, with a net profit of 107 crores. The following year, it lost 199 crores. The losses grew to 3,704 crores in only a few years. The termination of new shipbuilding orders, high financing costs, low capacity utilisation at Dahej, limited bank funding, and the expiration of a shipbuilding subsidy plan were all listed as factors. The worldwide economic downturn of 2008 is also thought to have had an impact.
The Downfall Of ABG
Given its history and performance in the shipbuilding business, ABG’s finances began to deteriorate in 2012, as shown by an investigative audit conducted by E&Y on behalf of SBI. During the audit, it was claimed that the firm’s senior management was engaging in fund diversions, resulting in embezzlement, with the objective of utilising the bank’s cash for self-gain, potentially in offshore accounts. The cash was being used to compensate several lenders and obtain lines of credit, according to SBI.
In October 2016, Standard Chartered Bank lodged a criminal case with Maharashtra’s Economic Offences Wing for defrauding them of a Rs 200 crore loan after they failed to fulfil the bank’s short-term loan.
What Is The ABG Shipyard Scam’s Scope?
It is clear that ABGSL obtained large loans from numerous banks and transferred the funds to non-disclosed objectives. Fund transfers to overseas companies, asset acquisitions, and transfers to linked parties were all part of this. According to the CBI investigation report of India’s Biggest Bank Scam, ABGSL formed roughly 100 businesses to syphon off monies intended to develop personal assets for corporate officials.
The majority of the ABG Shipyard scam occurred between 2007 and 2012. According to the CBI, the ABGSL accounts became non-performing on November 30, 2013.
Promoter Rishi Agarwal, as well as other executives Santhanam Muthaswamy, Ashwani Kumar, Sushil Agarwal, and Ravi Vimal Nevetia, are listed in the CBI’s FIR.
ICICI Bank was deceived of Rs 7,089 crore, IDBI Bank of Rs 3,639 crore, SBI of Rs 2,925 crore, Bank of Baroda of Rs 1,614 crore, Exim Bank of Rs 1,327 crore, Punjab National Bank of Rs 1,244 crore, Indian Overseas Bank of Rs 1,244 crore, and Bank of India of Rs 719 crore, as per the public records of India’s Biggest Bank Scam.
Other Large-Scale Bank Frauds In India
Apart from ABG Shipment Scam, below is the list of major bank frauds that took place in India:
The Nirav Modi Bank Scandal
The Nirav Modi Bank Scandal is being dubbed “India’s greatest bank scam,” with a total value of Rs 11,400 crore. Nirav Modi, a millionaire jeweller, and his uncle Mehul Surakshi are the key suspects in the scam.
Vijay Mallya’s Bank Scam
Until February 2018, Mallya’s Kingfisher Airlines had loaned Rs 9,432 crore from 13 banks. The State Bank of India lended the largest amount of 1600 crores, after that Punjab National Bank with an amount of 800 crores, followed byIDBI with 650 crores, and lastly the Bank of Baroda with an amount of 550 crores. Mallya fled India on March 2, 2016, and is currently residing in London, where the Indian government is battling for his extradition.
Allahabad Bank Scam
Allahabad Bank, situated in Kolkata, has stated that it has a $2,363 crores stake in the PNB fraud scandal. Allahabad Bank, on the other hand, stated that it is confident in the payment’s recovery because the exposure was completely covered by Letters of Undertaking (LoU) papers.
