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India files complaint against ABG Shipyard alleging $3billion bank fraud

India's federal investigation agency has filed a police complaint against ABG Shipyard Ltd and its promoters accusing it of defrauding banks of 228.42 billion Indian rupees ($3.03 billion).

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India’s federal investigation agency has filed a police complaint against ABG Shipyard Ltd and its promoters accusing it of defrauding banks of 228.42 billion Indian rupees ($3.03 billion).

The report, posted on the Central Bureau of Investigation’s website, said a forensic audit report it received from the banks two years ago had found instances of fraud in April 2012 and July 2017.

ABG Shipyard could not be reached for comment and did not immediately respond to an email. The shipbuilder, identified by the central bank as one of India’s “dirty dozen” highly indebted companies, has filed for bankruptcy resolution.

According to figures from the forensic audit that were included in the CBI complaint, the company owed 70.89 billion rupees to ICICI Bank (ICBK.NS), 36.34 billion rupees to IDBI Bank (IDBI.NS), 29.25 billion rupees to the State Bank of India (SBI.NS), 16.14 billion rupees to Bank of Baroda (BOB.NS), 12.44 bilion rupees to Punjab National Bank (PNBK.NS) and 12.28 billion rupees to Indian Overseas Bank .

State Bank of India, where the accounts of ABG Shipyard were maintained, had filed the forensic audit in a report to the CBI.

That report, included in the CBI complaint posted on Sunday, said the fraud took the form of diversion of funds, “misappropriation and criminal breach of trust with an objective to gain unlawfully at the cost of the Bank’s funds”.

“The money was used for purposes other than the purpose for which the funds were released by the Bank”, it said.

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