New Delhi, September 21
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) booked on February 7 Agarwal, a former chairman of the company, then chief executive Santhanam Muthaswamy and directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia.
Agarwal was called to CBI headquarters for questioning on Wednesday, which the investigating officer suspected was not cooperating with the investigation and gave evasive answers, after which he was arrested, officials said.
The CBI registered the case following a complaint by the State Bank of India over the alleged criminal offenses of criminal conspiracy, fraud, criminal breach of trust and abuse of office under the Indian Penal Code (IPC) and the Prevention of Corruption Act, she said.
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, officials said.
ABG shipyard is a major player in the Indian shipbuilding industry and operated from its Dahej and Surat shipyards in Gujarat with a capacity to build vessels of up to 18,000 deadweight tons (DWT) at Surat shipyard and 1,20,000 Tonnes Dead Weight (DWT). at the Dahej shipyard.
The company, which had experienced a phenomenal rise by building 165 ships in 16 years, began to show stress after the global slump in the shipping industry that led to irregularities in the repayment schedule.
“The cancellation of contracts for a few ships and ships led to an accumulation of stocks. This has resulted in a lack of working capital and a significant lengthening of the operating cycle, exacerbating the liquidity problem and the financial problem,” the SBI’s complaint reads. now part of FIR, has said.
In its complaint, the SBI said there was no demand for merchant vessels even in 2015 due to the downturn in the industry, compounded by the lack of defense orders, which made it difficult for the company to meet the repayment schedule.
After the credit accounts were declared non-performing assets in July 2016, a forensic review by the lending banks was ordered.
Ernst and Young’s investigation showed that the defendants conspired and engaged in illegal activities between 2012 and 2017, including diversion of funds, embezzlement and criminal embezzlement, officials said.
The funds were used for purposes other than those for which they were released by the banks, they said, adding that the company was “referred to NCLT, Ahmedabad, by ICICI Bank for the Corporate Insolvency Resolution Procedure (CIRP). became”.
The bank first filed a complaint on November 8, 2019, on which the CBI asked for some clarification on March 12, 2020. In August of the same year, she filed a new complaint. After over a year and a half of “review,” the CBI acted on the complaint and filed an FIR on February 7th.