CBI issues Look Out Circulars against ABG Shipyard directors over Rs 23,000 crore scam

In its biggest bank loan scam involving over Rs 23,000 crore, the Central Bureau of Investigation issued Look Out Circulars (LOCs) against directors of ABG Shipyard on Tuesday.  The Directors of the shipping firm include Rishi Agarwal, Santhanam Muthuswamy and Ashwini Kumar. 

The development comes after the Central agency in continuation with its investigation conducted searches at 13 locations on February 12, and recovered incriminating documents, such as books of accounts of accused borrower company, purchase/sales details, minutes of meetings of Board, share registers, various contract files. 

 "Accused have been located in India. Subsequently, LOCs against the accused have already been opened by CBI," the Central agency said in a statement.

ABG Shipyard bank loan scam 

ABG Shipyard is the flagship company of the ABG Group which is engaged in shipbuilding and ship repair. The ABGSL being a major player in the Indian shipbuilding industry operates from shipyards are located at Dahej and Surat in Gujarat with the capacity to build vessels up to 18,000 deadweight tonnage (DWT) at Surat Shipyard and 1,20,000 deadweight tonnage (DWT) at Dahej Shipyard. 

The Central agency started its investigation against ABG Shipyard on the complaint filed by SBI. The bank had first filed a complaint on 8 November 2019, on which the CBI had sought some clarifications on 12 March 2020. The bank filed a fresh complaint in August that year. After scrutinising for over one-and-a-half years, the CBI acted on the complaint, filing an FIR on 7 February 2022. 

“As per the bank (SBI) complaint, the non-profitable assets are to the tune of Rs 22,842 crores and the majority of disbursement took place between 2005 and 2012 by a consortium of 28 banks led by ICICI and included the SBI," the CBI said in a statement.

"A forensic audit by Ernst and Young has shown that between 2012-17, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation, and criminal breach of trust, they said. It is the biggest bank fraud case registered by the CBI. Funds were used for purposes other than for which they were released by banks", it said.

(With agency inputs)