Lookout circulars have been issued against the bosses and senior executives of ABG Shipyard in a Rs 23,000 crore alleged bank fraud case. A lookout circular is used to stop any person wanted by the law enforcement authorities from leaving the country via airports and border crossings.
The Directors of the shipping firm include Rishi Agarwal, Santhanam Muthuswamy and Ashwini Kumar. The case is said to be India’s biggest bank loan scam. ABG Shipyard defaulted on Rs 22,842 crore loans that it owed to 28 banks including State Bank of India, the Central Bureau of Investigation, or CBI, says.
ABG Shipyard diverted the funds to at least 98 related companies, sources have told NDTV.
ABG Shipyard is the flagship company of the ABG Group which is engaged in shipbuilding and ship repair. The shipyards are located in Dahej and Surat in Gujarat.
The latest lookout circular in the ABG Shipyard case adds to a long list of similar cases in the country, from the Punjab National Bank fraud involving businessmen Nirav Modi and his uncle Mehul Choksi to the defunct Kingfisher Airlines’ boss Vijay Mallya’s bank loan default. All of them are fighting extradition to India.
“In between April 2019 and March 2020, various banks of the consortium declared the account of ABG Shipyard as fraud. The fraud is primarily on account of huge transfer by ABG Shipyard to its related parties and subsequently making adjustment entries,” the CBI said in a statement.
“The huge investments were made in its overseas subsidiary by diverting the bank loans. Funds were diverted to purchase huge assets in the name of its related parties. During the perusal of records and initial investigation, it is seen that the critical period was 2005-2012,” the CBI said.
The CBI said withdrawal of “general consent” by state governments has made filing bank fraud cases more challenging. “There are some 100 high-value bank fraud cases that could not be registered due to non-accordance of specific consent… by state governments where the general consent has been withdrawn,” the CBI said in the statement.
States withdrawing “general consent” to the CBI, however, has little bearing on the ABG Shipyard case as it was filed in Delhi, where the CBI has original jurisdiction.