The Central Bureau of Investigation (CBI) on Wednesday arrested Rishi Kamlesh Agarwal, former chairman and managing director (CMD) of ABG Shipyard Ltd, in connection with its probe into the ₹22,842-crore bank fraud case, people familiar with the development said.
ABG Shipyard, the flagship company of the ABG Group and a major player in the Indian ship-building industry, is accused of cheating a consortium of 28 banks led by the ICICI of ₹22,842 crore between 2005 and 2012.
ICICI has the highest exposure in it at ₹7,089 crore, followed by IDBI Bank ( ₹3,639 crore), State Bank of India ( ₹2,925 crore), Bank of Baroda ( ₹1,614 crore) and Punjab National Bank ( ₹1,244 crore).
The federal agency had registered a case in the fraud, considered one of the biggest single bank fraud probes ever, in February this year and Agarwal has since been questioned multiple times. “He was arrested on Wednesday based on strong evidence. He was also evasive in his answers during interrogation,” said an officer who didn’t wish to be named.
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“I am surprised that my client was arrested despite so much cooperation with the CBI,” his lawyer Vijay Aggarwal said.
CBI investigations revealed that huge amounts taken from banks may have been diverted within India and abroad through over 100 shell companies by Agarwal, his associates and companies linked with ABG.
In a detailed statement in February, the central probe agency said a majority of disbursements in ABG Shipyard’s account took place between 2005 and 2012, and the loan account turned into a non-performing asset (NPA) on November 30, 2013. The Congress-led United Progressive Alliance government was in power between 2004 and 2014.
The State Bank of India first filed a complaint with the CBI on November 8, 2019 after which the agency sought some clarifications on March 12, 2020. The bank filed a fresh complaint in August that year. After “scrutinising” the complaint for over one-and-a-half years, the CBI filed a first information report (FIR) on February 7.
The Congress had targeted the Bharatiya Janata Party-led government after the CBI case in February, saying that the Centre was running a “loot and escape” flagship scheme. However, the agency clarified that the probe was focused only on irregularities during the 2005-2012 period.
CBI spokesperson RC Joshi said in February that “the fraud is primarily on account of a huge transfer by M/s ABG Shipyard to its related parties and subsequently making adjustment entries. It is also alleged that a huge investment was made in its overseas subsidiary by diverting the bank loans and funds to purchase huge assets in the name of its related parties. During the perusal of records and initial investigation, it is seen that the critical period was 2005-2012”.