New Delhi: A consortium of 20 banks is alleged to have suffered a fraud of Rs 22,824 crore. To understand the scale of the fraud, it can be said that this amount is more than the budget outlay for the recently announced PM Gati Shakti Master Plan, which was allocated Rs 20,000 crore by Finance Minister Nirmala Sitharaman. In fact, this amount is almost double of what Nirav Modi and Mehul Choksi siphoned off from Punjab National Bank in 2018.
The Central Bureau of Investigation (CBI), which was scrutinising the complaints filed by the SBI since November 2019, on 7 February filed an FIR against ABG Shipyard, ABG International Private Limited and five individuals and its directors, Rishi Kamlesh Agarwal, Santhanam Muthuswamy, Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevatia for allegedly defrauding 28 banks. The CBI has also mentioned unknown public servants in its FIR, indicating that the fraud was committed with the help of the employees of these banks. ABG Shipyard Ltd is the flagship company of the ABG Group, which is engaged in shipbuilding and ship repair. The shipyards are located in Dahej and Surat in Gujarat.
However, the SBI, in its complaint to the CBI, has given itself virtually a clean chit, while stating, “The bank is not suspecting the involvement of its staff in the fraud perpetrated by accused persons. The bank is also not suspecting any common conspirator.”
While the CBI was made aware of the suspected fraud in November 2019, the alleged fraud was committed in the five-year period between April 2012 and July 2017, raising questions as to the robustness of the system put in place by the SBI to detect and prevent such frauds.
The alleged fraud came to light when a forensic audit was conducted by Ernst & Young, which submitted its report to the SBI on 18 January 2019. The fraud was declared in the account by the fraud identification committee of the SBI on 19 June 2019. The account became an NPA one month later with effect from November 2013.
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 2020.
As per the complaint filed by Balaji Singh Samanta, DGM, State Bank of India, Stressed Assets Management Branch, Mumbai with the CBI, the estimated loss suffered by SBI is Rs 2,468.51 crore.
It has been noted that the SBI kept releasing this massive loan amount even as the value of security that was provided by the accused to SBI was of the value of Rs 10,48.50 crore only, less than 50% of its total exposure.
The claim amount that the banks have declared against the accused are: SBI, Rs 2,925 crore; ICICI, Rs 7,089 crore; IDBI, Rs 3639 cr; Bank of Baroda, Rs 1,614 cr; PNB, Rs 1,244 cr; Exim Bank of India Rs 1,327 cr; Indian Overseas Bank, Rs 1,228 cr; Bank of India, Rs 719 cr; Oriental Bank of Commerce (now PNB) Rs 714 cr; Standard Chartered, Rs 743 crore; Syndicate Bank (now Canara bank) Rs 408 cr; State Bank of India (Singapore), Rs 458 cr; Dena Bank (now Bank of Baroda), Rs 406 cr; Andhra Bank (now Union Bank of India), Rs 350 cr; and 14 other banks whose exposure ranges from Rs 260 cr to Rs 2 cr.
According to SBI, the accounts of the company were maintained at SBI Overseas branch, Mumbai where the fraud took place and at the branches of erstwhile State Bank of Patiala, Commercial Finance branch, New Delhi.
The fraud was alleged to have been committed through diversion of funds, misappropriation and criminal breach of trust with an objective to gain unlawfully at the cost of the banks’ fund.