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State Bank of India (SBI) on Sunday said there was no delay in the process of lodging a complaint with the Central Bureau of Investigation (CBI) in the case relating to fraud in the ABG Shipyard account.
This statement comes in the wake of CBI reportedly booking Gujarat-based ABG Shipyard Limited, its directors and others for allegedly causing a loss of ₹22,842 crore to a consortium of 28 banks. It is the biggest–ever case of bank fraud registered by the agency.
“At no point in time, there was any effort to delay the process. The lender’s forum diligently follows through with CBI in all such cases,” SBI said in a statement. The account is presently undergoing liquidation under a National Company Law Tribunal (NCLT) driven process.
“The leader in the consortium was ICICI Bank. Due to poor performance, the account was classified as a non-performing asset (NPA) on November 30, 2013. Several efforts were made to revive the company operations but could not succeed,” SBI said.
Failure to revive
The account was restructured under the Corporate Debt Restructuring mechanism in March 2014 by all lenders. However, as the shipping industry was going through a downturn, one of the worst ever seen, the operations of the company could not revive, per a SBI statement.
As the restructuring failed, the account was classified as NPA in July 2016 with backdated effect from November 30, 2013. E&Y was appointed as the forensic auditor by lenders during April 2018 and they submitted their report in January 2019.
“E&Y report was placed before the Fraud Identification Committee of 18 Lenders in 2019. Fraud is mainly attributed to diversion of funds, misappropriation, and criminal breach of trust,” SBI said.
Although, ICICI Bank was the lead lender in the consortium and IDBI was the second lead, it was preferred that SBI being the largest public sector lender, lodges the complaint with CBI. SBI said the first complaint was filed with CBI in November 2019. There was a continuous engagement between CBI and the banks and further information was getting exchanged.
“The circumstances of the fraud, as well as CBI requirements, were further deliberated in the various meetings of Joint Lenders and a fresh and comprehensive second complaint was filed in December 2020,” per the statement. The Bank noted that a fraud is declared basis the Forensic Audit report findings that are discussed thoroughly in joint lenders meetings.
Typically, when fraud is declared, an initial complaint is preferred with CBI, and based on their enquiries further information is gathered. In a few cases, when substantial additional information is gathered, a second compliant incorporating full and complete details is filed which forms the basis for the First Information Report, SBI said.
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