https://indianpedia.org/index.php?action=history&feed=atom&title=ABG_Shipyard_loan_fraudABG Shipyard loan fraud - Revision history2026-08-02T13:46:56ZRevision history for this page on the wikiMediaWiki 1.45.4https://indianpedia.org/index.php?title=ABG_Shipyard_loan_fraud&diff=483852&oldid=prevGreggNfb8421 at 09:13, 3 May 20262026-05-03T09:13:08Z<p></p>
<p><b>New page</b></p><div>{{Short description|Financial fraud in India}}<br />
{{Infobox event<br />
| title = ABG Shipyard loan fraud<br />
| image = <br />
| caption = <br />
| date = April 2012 – July 2017 <small>(period of fraud)</small><br />
| location = [[Surat]] and [[Dahej]], [[Gujarat]], India<br />
| also_known_as = ABG Shipyard scam<br />
| cause = Diversion of bank loans, misappropriation of funds, falsification of financial statements<br />
| first_reporter = [[State Bank of India]] (via forensic audit by [[Ernst & Young]], January 2019)<br />
| participants = '''Accused:'''<br/>Rishi Kamlesh Agarwal <small>(founder & CMD)</small><br/>Santhanam Muthaswamy <small>(executive director)</small><br/>Ashwini Kumar <small>(director)</small><br/>Sushil Kumar Agarwal <small>(director)</small><br/>Ravi Vimal Nevatia <small>(director)</small><br/>Dhananjay Datar <small>(CFO)</small><br/>ABG International Pvt Ltd<br/><br/><br />
'''Investigating agencies:'''<br/>[[Central Bureau of Investigation|CBI]]<br/>[[Enforcement Directorate|ED]]<br />
| outcome = {{unbulleted list<br />
| CBI FIR registered – 7 February 2022<br />
| CBI searches at 13 locations – 12 February 2022<br />
| Lookout circulars issued – 15 February 2022<br />
| Rishi Agarwal arrested – 21 September 2022<br />
| ED attaches assets worth ₹2,747.69 crore – 22 September 2022<br />
| CBI chargesheet filed against 25 accused – November 2022<br />
| ''Case ongoing''<br />
}}<br />
| notes = '''Total fraud amount:''' ₹22,842 crore (~US$2.8 billion)<br/>'''Number of defrauded banks:''' 28<br/>'''Lead lender:''' [[ICICI Bank]] (₹7,089 crore exposure)<br/>'''Complainant:''' [[State Bank of India]] (₹2,925 crore exposure)<br/>'''NPA declared:''' 30 November 2013<br/>'''Forensic auditor:''' [[Ernst & Young]] (appointed April 2018)<br/>'''Referred to [[NCLT]]:''' 1 August 2017<br/>Described as India's largest bank fraud case at the time of disclosure<br />
}}<br />
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'''ABG Shipyard loan fraud''' is a major financial scandal in India involving the diversion of bank loans and money laundering by the promoters of [[ABG Shipyard]]. They are accused of defrauding a consortium of 28 banks of {{INRConvert|22842|c}} between April 2012 and July 2017.<ref name=":1">{{Cite news |last= |first= |date=2022-02-12 |title=CBI books ABG Shipyard, others for ‘causing ₹22,842-cr. loss’ to banks |url=https://www.thehindu.com/news/national/cbi-books-abg-shipyard-others-for-causing-22842-cr-loss-to-banks/article38419976.ece |access-date=2026-03-14 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref><br />
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== Background ==<br />
ABG Shipyard was once operating yards in [[Surat]] and [[Dahej Port|Dahej]]. It obtained loans from 28 banks including [[ICICI Bank]], [[State Bank of India]], [[IDBI Bank]], [[Bank of Baroda]], and others primarily between 2005 and 2012 for ship construction.<ref>{{Cite news |date=2022-02-16 |title=Explained: What the SBI, ABG Shipyard Rs 22,892 crore controversy is all about |url=https://timesofindia.indiatimes.com/business/india-business/explained-what-the-sbi-abg-shipyard-rs-22892-crore-controversy-is-all-about/articleshow/89607587.cms |access-date=2026-03-14 |work=The Times of India |issn=0971-8257}}</ref> The company’s financial condition worsened rapidly after 2011–12, the year it earned its highest revenue. While it was first blamed on the global shipping crisis, the State Bank of India stated that the problem began with a drop in commodity demand and prices, which reduced cargo demand. This led to order cancellations, rising inventory, and eventually serious financial problems in the company’s records.<ref name=":0">{{Cite news |last=Srinivasan |first=Sriram |date=2022-02-19 |title=Explained {{!}} How did the ABG Shipyard fraud happen? |url=https://www.thehindu.com/news/national/explained-how-did-the-abg-shipyard-fraud-happen/article65065544.ece |access-date=2026-03-14 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref><br />
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In March 2014, the company started a corporate debt restructuring plan in which banks gave relief by allowing a break on interest payments, extending repayment time, and reducing interest rates. Despite this, the company suffered a loss of over {{INRConvert|900|c}} the next year, and its bank loans rose to around {{INRConvert|4300|c}}. The plan failed, and the company later admitted it had defaulted on loan payments. Banks then declared its accounts as non-performing assets from 13 November 2013. In 2017, ICICI Bank started insolvency proceedings at the [[National Company Law Tribunal]], which ordered the company’s liquidation in April 2019. The largest claims are from ICICI Bank of {{INRConvert|7089|c}}, followed by IDBI Bank of {{INRConvert|3639|c}} and SBI of {{INRConvert|2925|c}}.<ref name=":0" /> <br />
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But, the fraud was detected when banks commissioned a [[forensic audit]] by [[Ernst & Young]] and discovered {{INRConvert|22842|c}} embezzlement.<ref name=":1" /> As per the findings of the audit, the [[Central Bureau of Investigation]] registered a case in February 2022 on a complaint from the [[State Bank of India]].<ref>{{Cite news |last=Verma |first=Nidhi |date=13 February 2022 |title=India files complaint against ABG Shipyard alleging $3 billion bank fraud |url=https://www.reuters.com/world/india/india-files-complaint-against-abg-shipyard-alleging-3-bln-bank-fraud-2022-02-13/ |archive-date= |access-date=14 March 2026 |work=[[Reuters]]}}</ref> Later, the [[Enforcement Directorate]] initiated a money laundering probe, attaching assets worth {{INRConvert|2747|c}}.<ref>{{Cite news |last= |first= |date=2022-09-22 |title=ED attaches assets worth ₹2,747.69 crore in ABG Shipyard case |url=https://www.thehindu.com/news/national/ed-attaches-assets-worth-274769-crore-in-abg-shipyard-case/article65924018.ece |access-date=2026-03-14 |work=The Hindu |language=en-IN |issn=0971-751X}}</ref><ref>{{Cite web |last= |first= |date=2022-09-22 |title=ABG Shipyard fraud: ED attaches assets worth Rs 2,747 crore in money laundering probe |url=https://scroll.in/latest/1033445/abg-shipyard-fraud-ed-attaches-assets-worth-rs-2747-crore-in-money-laundering-probe |access-date=2026-03-14 |website=[[Scroll.in]] |language=en}}</ref><ref>{{Cite web |last= |first= |date=2022-09-22 |title=ED attaches assets worth ₹2,747.69 crore in ABG Shipyard case |url=https://www.thehindubusinessline.com/economy/logistics/ed-attaches-assets-worth-274769-crore-in-abg-shipyard-case/article65923380.ece |access-date=2026-03-14 |website=BusinessLine |language=en}}</ref> <br />
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== Investigations ==<br />
Investigators found that the company diverted loan money to related parties and hid it through accounting entries. Instead of using the loans for shipbuilding, some funds were invested in overseas subsidiaries in [[Singapore]]. They also discovered fake contracts, misuse of [[letter of credit]] and [[bank guarantees]], and the creation of 27 shell companies with money routed through 38 Singapore entities to move funds and invest in tax havens. In addition, properties were bought in the names of related people, and a {{INRConvert|75|c}} crore advance from the [[Indian Navy]] for training ships was allegedly not used for its intended purpose.<ref>{{Cite news |last=Ohri |first=Raghav |date=2024-01-17 |title=India's biggest bank fraud case: How ABG Shipyard steered the scam ship to divert funds |url=https://economictimes.indiatimes.com/industry/transportation/shipping-/-transport/ed-abg-shipyard-set-up-27-paper-companies-to-divert-funds/articleshow/106910900.cms?from=mdr |access-date=2026-03-14 |work=The Economic Times |issn=0013-0389}}</ref><br />
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== Legal proceedings ==<br />
As of 2026, the court proceedings are still going on and the company is undergoing liquidation.<ref>{{Cite web |last=Nair |first=Avinash |date=2022-02-17 |title=Explained: Rise and fall of Gujarat’s ABG Shipyard, now under probe for fraud |url=https://indianexpress.com/article/explained/rise-and-fall-of-gujarats-abg-shipyard-now-under-probe-for-fraud-7777288/ |access-date=2026-03-14 |website=The Indian Express |language=en}}</ref><br />
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== References ==<br />
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== Further reading ==<br />
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* {{Cite web |date=15 February 2022 |title=The account of M/s ABG Shipyard turned NPA on 30.11.2013 |url=https://cbi.gov.in/press-detail/NDgxOQ |access-date=14 March 2026 |website=[[Central Bureau of Investigation]]}}<br />
* {{cite journal |author=Banerjee |first=Samrat |author2=Islam |first2=Monirul |last3=Khandelwal |first3=Arushi |date=2025 |year=2025 |title=Impact of ABG Shipyard Scam on Share Price Movement of Select Indian Banks: A Testimonial from NIFTY Bank |url=http://publishingindia.com/jcar/47/impact-of-abg-shipyard-scam-on-share-price-movement-of-select-indian-banks-a-testimonial-from-nifty-bank/32220/98060/ |journal=Journal of Commerce and Accounting Research |volume=14 |issue=4 |pages= |issn=2277-2146 |via=[[EBSCOhost]], [[Wikipedia#The_Wikipedia_Library|The Wikipedia Library]]}}<br />
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[[Category:Finance fraud]]<br />
[[Category:Fraud in India]]<br />
[[Category:Financial scandals]]<br />
[[Category:Scandals in India]]</div>GreggNfb8421