No PSB staff involved in ABG fraud, says Sitharaman
NEW DELHI: No public sector bank (PSB) employee was found to be involved in the ₹14,349 crore bank fraud by ABG Shipyard Ltd (ABGSL) and the Central Bureau of Investigation (CBI) has registered a case against the company and its directors last month, Union finance minister Nirmala Sitharaman said on Tuesday.
ABGSL was sanctioned a loan under a consortium arrangement led by ICICI Bank and the account was declared as nonperforming asset (NPA) by the lender banks in August 2013, Sitharaman said in a written reply to the Rajya Sabha.
The loan to the company was later put up for corporate debt restructuring (CDR) in March 2014 by CDR empowered group.
Lender banks appointed EY to conduct a forensic audit of the company following the failure of CDR and classification of the account as NPA, Sitharaman pointed out.
The agency had submitted the forensic audit report (FAR) in January 2019.
The ABGSL account, which had a principal exposure of ₹14,349 crore and interest accrued on it, was declared as fraud by the lead banks on April 25, 2019, in view of the FAR findings, the minister said.
“As per input received from public sector banks, staff accountability has been conducted and no staff lapses or staff involvement in the fraud has been observed in examination of post NPA staff accountability and post fraud re-examination of staff accountability,” Sitharaman informed.
A complaint was filed with CBI by the State Bank of India (SBI) on November 8, 2019, and in a meeting of the joint lenders in January 2020, it was decided that SBI should file the complaint on behalf of all consortium lenders, she said.
“The mandate was garnered from all banks, with the last mandate being received on August 25, 2020. SBI filed the revised complaint with CBI on August 25, 2020, and the final complaint, based on further discussions, was filed on December 14, 2020,” she said.
CBI had booked ABG Shipyard Ltd and its former chairman and managing director Rishi Kamlesh Agarwal along with others, in the case that is touted as the biggest bank fraud, for allegedly cheating a consortium of banks on February 14, 2022.
As many as 27 banks and financial entities were engaged in the consortium lending to ABGSL, including erstwhile banks Oriental Bank of Commerce (OBC), Syndicate Bank, Dena Bank, Andhra Bank, and Laxmi Vilas Bank.
The top lenders to ABGSL are ICICI Bank with ₹7,089 crore, IDBI Bank (₹3,639 crore), SBI (₹2,925 crore), Bank of Baroda (₹1,614 crore), Punjab National Bank (₹1,244 crore), Exim Bank (₹1,327 crore), Indian Overseas Bank (₹1,228 crore), Bank of India (₹719 crore), and Standard Chartered Bank (₹743 crore).