New Delhi: Amid allegations of a delay in filing a complaint against the country's largest bank fraud totaling Rs 22,842 crore, State Bank of India (SBI) said on Sunday that it has been diligently following the ABG Shipyard fraud case with the CBI following the forensic audit report.
The Central Bureau of Investigation (CBI) recently charged ABG Shipyard Limited, its former chairman and managing director Rishi Kamlesh Agarwal, and others with defrauding a consortium of two dozen lenders led by ICICI Bank.

The ABG Shipyard fraud is much larger than the one committed by Nirav Modi and his uncle Mehul Choksi, who allegedly defrauded the Punjab National Bank (PNB) of around 14,000 crore through the issuance of fraudulent Letters of Undertaking (LoUs). 

During a press conference, Congress General Secretary Randeep Singh Surjewala questioned why it took five years after ABG Shipyard's liquidation proceedings to file even a FIR for defrauding 28 banks of Rs 22,842 crore.

"Why did the Modi government refuse to take note of the allegations made by the Congress on February 15, 2018, warning of a scam in ABG Shipyard, and why was no FIR lodged and criminal action taken despite their accounts being declared as fraudulent on June 19, 2019?" he asked. 

In response to the allegation, SBI stated in a statement that a fraud is declared based on the findings of the forensic audit report, which are thoroughly discussed in joint lender meetings. When a fraud is declared, an initial complaint is preferred with the CBI, and further information is gathered based on their inquiries.

"In a few cases, when significant additional information is gathered, a second complaint with full and complete details is filed, which serves as the basis for the FIR. There was no attempt to stall the process at any point. In all such cases, the lenders forum diligently follows through with CBI "It stated.

According to Mr. Surjewala, the SBI wrote to the CBI in November 2018 "claiming ABG Shipyard committed fraud and requesting the filing of a FIR and criminal charges Regardless, nothing happened, and the CBI returned the files to the SBI." The loan, given by a consortium of lenders led by ICICI Bank, became non-performing on November 30, 2013, according to the statement.

Several efforts were made to restart the company's operations but were unsuccessful, according to the statement, adding that the account was restructured under the CDR mechanism in March 2014 by all lenders but could not be recused.

"Due to the failure of the restructuring, the account was classified as an NPA (non-performing asset) in July 2016, with retroactive effect from November 30, 2013. Lenders appointed E&Y as forensic auditors in April 2018, and they submitted their report in January 2019. In 2019, the E&Y report was presented to the Fraud Identification Committee of 18 lenders. Diversion of funds, misappropriation, and criminal breach of trust are the most common types of fraud "It stated.

Although ICICI Bank was the consortium's lead lender and IDBI was the second, it was preferred that SBI, as the largest public sector bank, lodge the complaint with CBI, according to the statement.

In November 2019, the first complaint was filed with the CBI. "There was continuous engagement between the CBI and the banks, and additional information was being exchanged," the bank said in a statement.

The circumstances of the fraud, as well as CBI requirements, were further discussed in various Joint Lenders meetings, and a new and comprehensive second complaint was filed in December 2020, it added.

The account is currently being liquidated through an NCLT-driven process.

According to the Forensic Audit, the accused conspired and committed illegal activities such as fund diversion, misappropriation, and criminal breach of trust between 2012 and 2017.