Amid allegations of delay in filing of a complaint against the country's biggest bank fraud totalling Rs 22,842 crore, the 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 the 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 was taken despite their accounts having been declared as a fraud on June 19, 2019?" he asked. Responding to the allegation, SBI in a statement said that fraud is declared on the basis of the forensic audit report findings that are discussed thoroughly in joint lenders meetings and when 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 the basis for the FIR. At no point in time, there was an effort to delay the process. The lender's forum diligently follows through with CBI in all such cases," it said.
Surjewala said SBI wrote to the CBI in November 2018 stating that 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 backdated effect from November 30, 2013. E&Y was appointed as forensic auditor by lenders in 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 is the largest public sector bank, lodges the complaint with CBI, it said.
"The first complaint was filed with CBI in November 2019. There was a 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 an 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.
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