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CBI arrests ABG Shipyard founder Rishi Agarwal in loan default case

The company was sanctioned credit facilities from 28 banks and financial institutions led by the ICICI Bank, with the State Bank of India (SBI) having an exposure of Rs 2,468.51 crore, the officials said.

The company was sanctioned credit facilities from 28 banks and financial institutions led by the ICICI Bank, with the State Bank of India (SBI) having an exposure of Rs 2,468.51 crore, the officials said. (File)

Former Chairman and managing director (CMD) of ABG Shipyard Rishi Agarwal was arrested on Wednesday by the CBI in connection with its probe into the Rs 22,842 crore loan default by the company.

On February 7, the CBI had booked Agarwal, the then executive director Santhanam Muthaswamy, and directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi Vimal Nevetia on February 7.

“Agarwal was called for questioning on Wednesday at the CBI headquarters during which the investigating officer suspected that he was not co-operating in the probe and was evasive in responses following which he was arrested,” a CBI spokesperson said.

The CBI had registered the case on a complaint from the State Bank of India for the alleged offences of criminal conspiracy, cheating, criminal breach of trust and abuse of official position under the IPC and the Prevention of Corruption Act.

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“The SBI with an exposure of Rs 2,468.51 crore was part of a consortium of 28 banks and financial institutions led by ICICI Bank. The ABG Shipyard being a major player in Indian ship building industry operated from its shipyards located at Dahej and Surat in Gujarat with capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat shipyard and 1,20,000 dead weight tonnage (DWT) at Dahej shipyard,” an official said.

The company, which had witnessed phenomenal rise having constructed 165 vessels in 16 years, started showing stress following global slump in the shipping industry bringing irregularities in repayment schedule. “The cancellation of contracts for few ships and vessels resulted in piling up of inventory. This resulted in paucity of working capital and caused significant increase in the operating cycle, thereby aggravating the liquidity problem and financial problem,” the complaint from the SBI, now part of the FIR, alleged.

“Once the loan accounts were declared non-performing assets in July 2016, a forensic audit was ordered by the lender banks. The audit by Ernst and Young showed that between 2012 and 2017, the accused colluded together and committed illegal activities, including diversion of funds, misappropriation and criminal breach of trust,” the official said.

First published on: 21-09-2022 at 06:28:12 pm
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