September 30, 2023

Fraud Analysis

ED confiscates more than Rs.2,000 Cr worth of assets in the ABG Shipyard case

The Enforcement Directorate confiscated assets valued at Rs. 2,747 crores in the Rs.22,842 crore fraud case related to ABG Shipping.

The seized assets include a couple of shipyards at Dahej and Surat, ABG’s bank accounts and group companies, commercial and residential properties in Maharastra and Gujarat, and various agricultural lands.

Based on an FIR registered in early 2022 by the CBI, the Enforcement Directorate conducted the investigation against ABG Shipyard and other entities in what was possibly the largest bank fraud case in the country.

Initial investigations revealed that the company Chairman and MD, Mr Rishi Kamlesh Agarwal, borrowed loans from a consortium of banks led by ICICI Bank.
Instead of using the loans to fund its business and capital requirements, ABG Shipyard misused the money for other entities in India and other countries, eventually causing a monetary loss of a whopping Rs.22,842 crores to the banks.

The various assets seized by the ED under the Prevention and Money Laundering Act 2022 belong to ABG Shipyard and its group companies.

 

Although ICICI Bank led the consortium of 28 banks against ABG Shipping, the State Bank of India was the largest lender who lodged the CBI complaint. SBI had funded ABG Shipyard since 2001 until their account became a non-performing asset (NPA) in 2013, with bad loans to the tune of Rs.22,842 Cr.

Despite restructuring the account in March 2014, the company could not be saved from the dwindling crisis. After a stock audit by N.V.Dand & Associates, the company was declared NPA in July 2016.

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