ABG Shipyard was incorporated on 15 March 1985, has been banking arrangements since 2001. Financed under Consortium arrangement over a two dozen lenders. Leader in Consortium was ICICI Bank. Due to poor performance, account became NPA on 30/11/2013. Several efforts were made to revive the company operations but could not succeed.
Account was restructured under CDR mechanism in March 2014 by all lenders. However, as the shipping industry was going through a down turn, one of the worst ever seen, the operations of the company could not revive.
As the restructuring failed, account classified as NPA in July 2016 with back dated effect from 30th Nov. 2013. E&Y were appointed as Forensic Auditor by lenders during April 2018 and they submitted their report in January 19. E&Y report was placed before the Fraud Identification Committee of 18 Lenders in 2019. Fraud is mainly attributed to diversion of funds, misappropriation and criminal breach of trust.
Although, ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI being the largest PSB lender, lodges the complaint with CBI. The first complaint was filed with CBI in Nov 2019. There was continuous engagement between CBI and Banks and further information was getting exchanged.
The circumstances of the fraud as well as CBI requirements were further deliberated in the various meetings of Joint Lenders and a fresh and comprehensive second complaint was filed in Dec. 2020. The account is presently undergoing liquidation under a NCLT driven process.
A fraud is declared basis the Forensic Audit report findings that is discussed thoroughly in joint lenders meetings. Typically, when a fraud is declared, an initial complaint is preferred with CBI and based on their enquiries further information is gathered. In a few cases, when substantial additional information is gathered, a second complaint incorporating full and complete details is filed which forms basis for the FIR. At no point in time, there was any effort to delay the process. The lenders forum diligently follows through with CBI in all such cases.
Source-
Press release about ABG Shipyard issue. @DFS_India @FinMinIndia
Our statement -: pic.twitter.com/RP71DBhePD
— State Bank of India (@TheOfficialSBI) February 13, 2022
