ABG shipyard Limited is an Mumbai based shipbuilding company in India. Established in 1985.
ABG shipyard has allegedly defrauded banks of nearly 23000 crores. It is considering the biggest banking fraud in the India’s history.
The matter come out after an audit conducted by EY pointed towards the fraud. As on the FIR filed by CBI on 7 Feb, CBI is investing the allegations of diversion and misappropriation of funds and also criminal breach of trust. The FIR was filed on the basis of SBI’s November 2019 complaint which would follow by more detailed complaint in DEC 2020. Before the complaint of SBI, The National Company Law Tribunal (NCLT) had ordered liquidation of ABG shipyard in April 2019 under the Insolvency & Bankruptcy Code.
CBI has summoned five of ABG 8nternational Pvt. And unnamed public servants. Total amount of 22,842 crore claimed by 28 banks as their NPA was increasing.
On this event of series, Finance Minister said at a press conference after addressing the members of the RBI board, “in this particular case with that kind of a measurement, actually, I should say to the credit to the banks, they have taken lesser than what is normally an average time to detect these kinds of frauds”
ICICI Bank and SBI have a huge stake in the bad loans which comes around 44%. These are two domesric systematically important banks.
Major stake in the bad loan as follows;
ICICI Bank- ₹7,089 crore with loss of -3.10%
IDBI Bank- ₹3,639 crore with loss of -3.70%
SBI- ₹2,925 crore with loss of-3.20%
Bank of Baroda – ₹1,614 crore with loss of-3.30%
PNB- ₹1,244 crore with loss of-3.80%
Others- ₹6,331 crore
Total- ₹22,842 crore
There are some allegations;
In 2019, forensic audit report of EY which was also attached by complaint of company exposed that company indulged in a number of illegal activities. In the audit EY found discrepancy transactions between April 2012 and July 2017.
ABG shipyard also invest in preferential shares worth $43.5M by AGB Singapore, its foreign subsidiary. In FY10 and FY11 ABG Singapore got loams from ABG shipyard, mentioned in EY reports. The reports has alleged that payments to the foreign subsidiary may have been potentially.