CBI arrests ABG Shipyard founder-chairman Rishi Agarwal in Rs 22,842 crore bank fraud case

The Central Bureau of Investigation (CBI) on Wednesday arrested ABG Shipyard Limited's founder- chairman Rishi Kamlesh Agarwal in connection with an alleged bank fraud of more than Rs 22,842 crore, according to PTI.

The central probe agency had registered a case against him and few others in February this year and had carried out searches at 13 locations just days after filing the case.  

The CBI had booked Agarwal and others for criminal conspiracy, cheating, criminal breach of trust under the Indian Penal Code (IPC) and the Prevention of Corruption Act. The case was based on a complaint filed by the State Bank of India (SBI). 

In a statement issued in February, the CBI said that ABG Shipyard Ltd had been in business with the SBI since 2001. The shipbuilding company had secured credit facility of Rs 22,842 crore and the majority of the disbursement happened between 2005 and 2012 by a consortium of 28 banks led by ICICI Bank and SBI. 

However, between April 2019 and March 2020, several banks declared the account as fraud based on a forensic audit conducted by Ernst and Young in 2018. The CBI said that the fraud was primarily on account of huge transfer by the company to some of the accused. It was also alleged that the huge investment were made in its overseas subsidiary by diverting the bank loans. The probe agency said funds were diverted to purchase huge assets.

Besides the founder chairman, the central agency has also booked the then executive director Santhanam Muthaswamy, directors Sushil Kumar Agarwal, Ashwini Kumar and Ravi Vimal Nevetia. They have been booked for criminal conspiracy, cheating, criminal breach of trust under the IPC and the Prevention of Corruption Act.

Earlier this year, the agency had issued lookout notices against Agarwal, and eight others.