Former chairman of ABG Shipyard Rishi Agarwal has been questioned in connection with the Central Bureau of Investigation in connection with the Rs 22,842 crore bank scam, said the largest in the country.
Sources said the agency searched his home on Saturday, then a subpoena was issued and he was questioned this week.
The agency is investigating ABG Shipyard Ltd and its former directors Rishi Agarwal, Santhanam Muthuswamy and Ashwini Kumar, who have been accused of defrauding 28 banks of Rs 22,842 crore.
According to a complaint from the State Bank of India, the company owes Rs 2,925 crore to the bank, Rs 7,089 crore to ICICI Bank, Rs 3,634 crore to IDBI Bank, Rs 1,614 crore to Bank of Baroda, Rs 1,244 to PNB and Rs 1,228 crore to IOB. The funds were used for purposes other than those for which they were released by banks, the CBI said.
Yesterday, Enforcement launched a money laundering investigation against them in connection with the fraud case.
The CBI alleged that the former promoters had funneled the loans to 98 affiliated companies. The ED will investigate the alleged “diversion”, the creation of empty firms to launder public money and the role of company leaders, sources said.
Gujarat-based ABG Shipyard – once a major player in shipbuilding and ship repair – is the flagship company of the ABG Group. The shipyards – located in Dahej and Surat in Gujarat – have built more than 165 ships in the past 16 years. 46 of these ships were destined for export.
The alleged fraud was discovered in 2019 during a forensic audit by Ernst and Young LLP.
In its complaint, the State Bank said the global downturn in the economy and the shipbuilding sector had sparked the crisis, the Press Trust of India reported. It had “impact on the shipping industry as a result of the decline in demand and prices of raw materials and the subsequent decline in freight demand”.
“The cancellation of contracts for some vessels and vessels resulted in a build-up of inventories. This has led to a lack of working capital and a significant increase in the business cycle, exacerbating the liquidity and financial problem,” the complaint reported, PTI reported. †