ICICI, IDBI, SBI, LIC hit in Rs 22,842 cr ABG scam State Bank of India had first reported the scam

 

 

 

THE sensational Rs 22,842 crore mega loan fraud allegedly perpetrated by the Gujarat-based ABG Shipyard Ltd (ABGSL) did not spare the IPO-bound Life Insurance Corporation of India (LIC) while the ICICI Bank and the IDBI Bank were the worst-hit among other banks, FII and corporates, as per official data. The State Bank of India (SBI) which first reported the scam, has named ABG Shipyard Ltd, the corporate guarantor ABG Shipyard International Pvt Ltd, the company’s Chairman-cum-Managing Director Rishi Kamlesh Agarwal, Executive Director Santhanam Muthaswamy, Directors Sushil Kumar Agarwal, Ashwini Kumar (all from Mumbai), Ravi Vimal Nevetia (Pune), besides unknown persons and public servants. However, the private ICICI Bank has been duped of a staggering Rs 7,089 crore, the highest - followed by the IDBI Bank Ltd, ranking second with the fraud amount of Rs 3,639 crore. At the third position is the SBI which has admitted its exposure to the tune of Rs 2,925 crore.

 

The giant-IPO bound LIC also has been grazed by Rs 136 crore with the sole consolation being the entire amount is said to be ‘secured’. Highlighting the scam, the SBI, has pointed accusing fingers at the (above-mentioned) ABGSL officials for committing the ‘criminal activities,’ but has given a clean chit to its own staff. In the first complaint to the CBI way back on Aug 25, 2020, the SBI had stated: “The accused (ABGSL & its officials) colluded together in committing the criminal activities. However, the involvement of unknown persons and public servants may also be examined during investigations.” It added: “The (SBI) Bank is not suspecting the involvement of its staff in the fraud perpetrated by the accused persons. The bank is not suspecting any common conspirator.” To the CBI’s query on this aspect, the SBI said the Competent Authority had dealt with and closed the matter of ‘staff accountability’ in Nov 2018. A forensic Audit report (Jan 18, 2019) for the period April 2012-July 2017) revealed how the ABGSL accused “colluded together and committed illegal activities, including diversion of funds, misappropriation, criminal breach of trust and for purposes other than for which the funds are released by the Bank.”

 

Loans to ABG Shipyard turned NPAs prior to 2014: FM: Finance Minister Nirmala Sitharaman on Monday said the ABG Shipyard account turned NPA during the erstwhile UPA regime and the banks took lesser than normal time to detect the fraud perpetrated by the shipping firm. “...in this particular case with that kind of a measurement, actually, I should say to the credit to the banks, they’ve taken lesser than what is normally an average time to detect these kinds of frauds,” Finance Minister Nirmala Sitharaman said at a press conference after addressing the members of the RBI board.

 

The Minister said normally banks take 52-56 months of time to detect such cases and initiate follow-up actions. The 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). Sitharaman also said that during the NDA regime, health of banks has improved and they are in position to raise funds from the market. Addressing the press conference, the RBI Governor Shaktikanta Das asserted that RBI’s inflation projections are quite robust. He further said the momentum of inflation, from October 2021 onwards, is on a downward slope.