Rishi Kamlesh Agarwal, the former Chairman and Managing Director (MD) of ABG Shipyard Ltd, is booked by the CBI for criminal conspiracy, cheating, criminal breach of trust, and abuse of official position under the IPC and the Prevention of Corruption Act. Also, he is the MD of Vadaraj Energy Ltd, Gujarat.
This is the biggest ever bank fraud case registered by CBI. ABG Shipyard Ltd is known for shipbuilding and repair. It has its yards in Gujarat’s Surat and Dahej. The company can build vessels up to 18,000-deadweight tonnage at the Surat shipyard and a 1.20-lakh deadweight load at the Dahej unit.
ABG was born when Agarwal bought a small shipbuilding facility called Magdala Shipyard Pvt Ltd, a repairer of small boats. The ambitious Agarwal set up building scale and sophistication. By 2005, the shipyard was capable of building bulk carriers, specialised defence vehicles, and other big ships.
2011, ABG bagged an Rs. 970 crore order from the Indian Navy to build two cadet training ships.
But he was deep in debt. In 2016/17, revenues were Rs 16.40 crore, while debt was Rs10,000 crore. A restructuring saw bankers take control in 2016 by converting debt into equity. By the time it came up for resolution, Agarwal no longer had anything to do with his company.
A written complaint dated 25.08.2020 was received from Shri Balaji Singh Samanta, DGM, State Bank of India, SAM Branch, The Arcade, II Floor, World Trade Centre, Cuffe Parade, Colaba, Mumbai-400005, against the Company M/s ABG Shipyard Ltd is having a registered office at Magdala Village, Off Dumas Road, Surat-395007, Gujarat.
Besides Agarwal, the agency has also named the then Executive Director Santhanam Muthaswamy, Directors Ashwini Kumar, Sushil Kumar Agarwal, Ravi Vimal Nevetia, and another company ABG International Pvt Ltd, in the case.
The company was sanctioned credit facilities from 28 banks and financial institutions where the SBI had exposure of Rs 2468.51 crore. The other banks include:
ICICI Bank (Rs 7,089 crore).
IDBI Bank (Rs 3,634 crore).
Bank of Baroda (Rs 1,614 crore).
PNB (Rs 1,244 crore and IOB (Rs 1,228 crore).
The consortium of 28 banks was led by ICICI Bank.
Agarwal is the nephew of Ruia brothers Shashi and Ravi, who recently confirmed their multi-billionaire status when their 33% holding in Hutchison Essar was valued at over $6 billion after Vodafone bought the company. ABG operates from a shipyard close to Essar’s Hazira plant in Gujarat.
The Forensic Audit has shown that between 2012-17, the accused conspired together and committed illegal activities, including diversion of funds, misappropriation, and criminal breach of trust. The fraud has also occurred at the erstwhile State Bank of Patiala branches, Commercial Finance Branch, New Delhi, and State Bank of Travancore, Commercial Branch, New Delhi.
It was also alleged that bank loans to the said private company were diverted, and massive investment was made in the overseas subsidiary. It was further alleged that funds from banks were diverted to purchase considerable assets in the name of its related parties.
Anyway, the investigation continues.