| Date | April 2012 – July 2017 (period of fraud) |
|---|---|
| Location | Surat and Dahej, Gujarat, India |
| Also known as | ABG Shipyard scam |
| Cause | Diversion of bank loans, misappropriation of funds, falsification of financial statements |
| First reporter | State Bank of India (via forensic audit by Ernst & Young, January 2019) |
| Participants | Accused: Rishi Kamlesh Agarwal (founder & CMD) Santhanam Muthaswamy (executive director) Ashwini Kumar (director) Sushil Kumar Agarwal (director) Ravi Vimal Nevatia (director) Dhananjay Datar (CFO) ABG International Pvt Ltd Investigating agencies: CBI ED |
| Outcome |
|
| Total fraud amount: ₹22,842 crore (~US$2.8 billion) Number of defrauded banks: 28 Lead lender: ICICI Bank (₹7,089 crore exposure) Complainant: State Bank of India (₹2,925 crore exposure) NPA declared: 30 November 2013 Forensic auditor: Ernst & Young (appointed April 2018) Referred to NCLT: 1 August 2017 Described as India's largest bank fraud case at the time of disclosure | |
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 ₹22,842 crore (US$3.2 billion) between April 2012 and July 2017.[1]
Background[edit | edit source]
ABG Shipyard was once operating yards in Surat and 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.[2] 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.[3]
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 ₹900 crore (US$130 million) the next year, and its bank loans rose to around ₹4,300 crore (US$600 million). 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 ₹7,089 crore (US$990 million), followed by IDBI Bank of ₹3,639 crore (US$510 million) and SBI of ₹2,925 crore (US$410 million).[3]
But, the fraud was detected when banks commissioned a forensic audit by Ernst & Young and discovered ₹22,842 crore (US$3.2 billion) embezzlement.[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.[4] Later, the Enforcement Directorate initiated a money laundering probe, attaching assets worth ₹2,747 crore (US$390 million).[5][6][7]
Investigations[edit | edit source]
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 ₹75 crore (US$11 million) crore advance from the Indian Navy for training ships was allegedly not used for its intended purpose.[8]
Legal proceedings[edit | edit source]
As of 2026, the court proceedings are still going on and the company is undergoing liquidation.[9]
References[edit | edit source]
- ↑ 1.0 1.1 "CBI books ABG Shipyard, others for 'causing ₹22,842-cr. loss' to banks". The Hindu. 2022-02-12. ISSN 0971-751X. Retrieved 2026-03-14.
- ↑ "Explained: What the SBI, ABG Shipyard Rs 22,892 crore controversy is all about". The Times of India. 2022-02-16. ISSN 0971-8257. Retrieved 2026-03-14.
- ↑ 3.0 3.1 Srinivasan, Sriram (2022-02-19). "Explained | How did the ABG Shipyard fraud happen?". The Hindu. ISSN 0971-751X. Retrieved 2026-03-14.
- ↑ Verma, Nidhi (13 February 2022). "India files complaint against ABG Shipyard alleging $3 billion bank fraud". Reuters. Retrieved 14 March 2026.
- ↑ "ED attaches assets worth ₹2,747.69 crore in ABG Shipyard case". The Hindu. 2022-09-22. ISSN 0971-751X. Retrieved 2026-03-14.
- ↑ "ABG Shipyard fraud: ED attaches assets worth Rs 2,747 crore in money laundering probe". Scroll.in. 2022-09-22. Retrieved 2026-03-14.
- ↑ "ED attaches assets worth ₹2,747.69 crore in ABG Shipyard case". BusinessLine. 2022-09-22. Retrieved 2026-03-14.
- ↑ Ohri, Raghav (2024-01-17). "India's biggest bank fraud case: How ABG Shipyard steered the scam ship to divert funds". The Economic Times. ISSN 0013-0389. Retrieved 2026-03-14.
- ↑ Nair, Avinash (2022-02-17). "Explained: Rise and fall of Gujarat's ABG Shipyard, now under probe for fraud". The Indian Express. Retrieved 2026-03-14.
Further reading[edit | edit source]
- "The account of M/s ABG Shipyard turned NPA on 30.11.2013". Central Bureau of Investigation. 15 February 2022. Retrieved 14 March 2026.
- Banerjee, Samrat; Islam, Monirul; Khandelwal, Arushi (2025). "Impact of ABG Shipyard Scam on Share Price Movement of Select Indian Banks: A Testimonial from NIFTY Bank". Journal of Commerce and Accounting Research. 14 (4). ISSN 2277-2146 – via EBSCOhost, The Wikipedia Library.
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