No state bank employee was found involved in the ABG shipyard case: Nirmala Sitharaman

Nirmala Sitharaman said the CBI filed a FIR against the company on February 7, 2022.

New Delhi:

Finance Minister Nirmala Sitharaman said on Tuesday that ABG Shipyard Ltd (ABGSL) had found no public sector bank employees involved in 14.349 billion euros in bank fraud, and the CBI had filed a case against the company and its executives last month.

ABG Shipyard was sanctioned by a loan from a consortium led by ICICI Bank, which was declared a non-performing asset (NPA) by bank lenders in August 2013 and later, Sitharaman said in a written reply to Rajya Sabha.

The loan granted to the company was approved in March 2014 for restructuring under corporate debt restructuring (CDR) by the CDR empowerment team.

Sitharaman said that after the failure of the CDR and the classification of the account as NPA, the donor banks appointed him EY to conduct the forensic audit of the company. The agency submitted a forensic audit report (FAR) in January 2019.

Therefore, in view of the FAR’s findings, the main bank declared the ABGSL account with a principal exposure of Rs 14,349 million and the interest accrued on it, which was declared fraudulent by the major banks on April 25, 2019, he said.

“According to the contribution received from the public sector banks, staff responsibility has been done and no employee gaps / employee involvement have been seen in this fraud when re-examining post-NPA employee accounts / post-fraud employee liability,” Sitharaman said.

The Minister also reported that on November 8, 2019, the State Bank of India (SBI) filed a complaint with the Central Bureau of Investigation (CBI), which was subsequently decided at the January 2020 meeting of the joint lenders. The SBI should file a complaint on behalf of all donors in the consortium.

“Accordingly, the mandate was obtained from all banks, the last mandate was received on August 25, 2020. The SBI filed a revised CBI complaint on August 25, 2020, and the final complaint, based on further discussion, was filed in December. On December 14, 2020,” he added.

Sitharaman said the CBI filed its first information report (FIR) against the company and its directors on February 7, 2022.

About 27 banks and financial institutions participated in the loan agreement with the ABGSL loan consortium, including the former banks: Oriental Bank of Commerce (OBC), Syndicate Bank, Dena Bank, Andhra Bank and Laxmi Vilas Bank.

The main lenders with the highest exposure to the company are: ICICI Bank 7,089 million; IDBI Bank 3,639 million; SBI 2,925 million; Baroda Bank 1,614 million; Punjab National Bank 1,244 million; Exim Bank 1,327 million; Overseas Bank of India 1,228 million; Bank of India 719 million; Standard Chartered Bank Rs 743 million.

The former Eastern Trade Bank, now merged with the GNP, had an exposure of Rs 714 crore; Syndicate Bank (now Canara) 408 million; All Bank (now BoB) 406 million; and Andhra Bank (now Union Bank of India) Rs 350 million.

Among others, IFCI lent 300 million, SBI Singapore 458 million; and SICOM Ltd Rs 260 million.

Named as the largest bank fraud case, CBI booked ABG Shipyard Ltd and its former chairman and managing director Rishi Kamlesh Agarwal along with others, allegedly for a bank consortium for fraud on 14 February 2022.

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