The Central Bureau of Investigation (CBI) has issued look-out circulars against the accused persons in connection with the ₹22,842-crore bank fraud case by the Gujarat-based ABG Shipyard Limited and others, in order to prevent their escape from the country.
The agency said the accused have been located in India. The State Bank of India (SBI) had also opened the circulars against the main accused in 2019.
The company, which is in the business of ship building and repair, had been availing itself of credit facilities from the SBI since 2001. ABG Shipyard had taken loan from a consortium of 28 banks led by the ICICI Bank.
“A majority of the disbursement was made between 2005 and 2012...the account was restructured under CDR [Corporate Debt Restructuring] mechanism on March 27, 2014. However, the operations of the company could not be revived. On September 10, 2014, N. V. Dand & Associates was deputed to conduct stock audit of ABG Shipyard,” said the agency.
The audit firm submitted its report on April 30, 2016, and observed various faults on the part the accused company. The company’s loan was declared a non-performing asset (NPA) on July 30, 2016, with effect from November 30, 2013.
“In keeping with a policy implemented since 2014, of red-flagging suspect accounts, commissioning forensic audits by empanelled forensic auditors, and making chairman-cum-managing directors liable, a forensic audit was initiated based on the lenders’ decision in the joint lenders’ meeting on April 10, 2018,” the CBI said, adding that Ernst & Young LLP was appointed as the forensic auditor.
The agency said as per the usual practice, forensic audits cover a period starting about three to four years prior to the date of declaration of NPA, which in this case was 2016. The audit covered the period from 2012 to 2017. The company was also referred to the National Company Law Tribunal-Ahmedabad for Corporate Insolvency Resolution Process.
Various consortium members declared the account as fraud between April 2019 and March 2020. It was on account of huge fund transfers by the company to its related parties and subsequent adjustment entries. Huge investments were made in its overseas subsidiary by diverting the bank loans and assets were also acquired.
The SBI lodged another complaint with the CBI on August 25, 2020, after the agency had raised queries with regard to the complaint made in 2019. The CBI scrutinised the financial records of about 98 related entities. “It is a time consuming process. After analysing all the basic facts, the case was registered on February 7. Searches were also conducted at 13 locations on February 12.
Further correspondences are being made with the consortium banks to provide details including documents with regard to sanction of loan and its disbursal.
