ABG Shipyard fraud

Four years after the Rs 14,000-crore Punjab National Bank scam rocked the country’s financial sector, an even bigger fraud has hit the headlines. The CBI has booked Gujarat-based ABG Shipyard Limited and its directors for allegedly cheating a banks’ consortium of more than Rs 22,842 crore. The case has triggered a blame game, with the Congress accusing the BJP of delaying action against the company even though irregularities had been red-flagged by the State Bank of India and the Comptroller and Auditor General (CAG) over the years. The BJP has stated that it was during Congress-led UPA’s rule that the firm managed to borrow thousands of crores of rupees from public sector banks.

Successive governments at the Centre and in Gujarat cannot absolve themselves of responsibility for allowing ABG a free rein for so long. In a report tabled in the state Assembly in July 2014, CAG had pulled up the state-run Gujarat Maritime Board (GMB) for not taking ‘any action to suspend the operation of shipbuilding facility of ABG’ over its failure to pay pending lease rent to the tune of Rs 2.1 crore in spite of repeated reminders. That even this relatively small amount had not been paid should have set the alarm bells ringing. The GMB had handed over possession of the waterfront and adjoining backup land in Bharuch district to ABG in May-July 2006 on 30 years’ lease. During the UPA’s term, the company received orders from the Coast Guard and the Navy for building ships and interceptor boats. These big-ticket projects immensely raised ABG’s public profile and allegedly helped it take various banks for a ride.

It’s vital to establish whether major contracts were bagged through hefty kickbacks. The accountability of the then ministers and government officials who gave the go-ahead to the deals needs to be fixed. The bank staffers who facilitated the disbursal of loans despite the company’s steeply rising debt burden should also be brought to book. Making India corruption-free will remain a distant dream unless exemplary action is taken to punish the perpetrators and abettors of such monstrous frauds. 

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