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Finnacle Express ABG Shipyard Ltd. Scam-India's Biggest Bank Fraud?

The CBI has filed a case against ABG Shipyard Ltd for causing losses of Rs 22,842 crores to a bank consortium. The investigation found that ABG set up 98 shell companies to siphon money and used diverted funds to build personal assets and for loan evergreening. Between 2007-2009 properties worth Rs. 83 crores were purchased using security deposits, and in March 2016 funds of Rs. 15-16 crores were transferred from ABG SL to another company. While the alleged fraud is predicted to be India's largest banking fraud, the CBI says withdrawing of state consent has made registering bank fraud cases more challenging. To stay safe from rising online financial frauds, organizations should keep financial

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87 views

Finnacle Express ABG Shipyard Ltd. Scam-India's Biggest Bank Fraud?

The CBI has filed a case against ABG Shipyard Ltd for causing losses of Rs 22,842 crores to a bank consortium. The investigation found that ABG set up 98 shell companies to siphon money and used diverted funds to build personal assets and for loan evergreening. Between 2007-2009 properties worth Rs. 83 crores were purchased using security deposits, and in March 2016 funds of Rs. 15-16 crores were transferred from ABG SL to another company. While the alleged fraud is predicted to be India's largest banking fraud, the CBI says withdrawing of state consent has made registering bank fraud cases more challenging. To stay safe from rising online financial frauds, organizations should keep financial

Uploaded by

guesswhoiam
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Finnacle Express

Financial Frauds

ABG Shipyard Ltd. Scam-


India’s Biggest Bank
Fraud?
The CBI, which is investigating one of
the largest bank frauds, filed a case
against the insolvent ABG Shipyard Ltd.,
its promoters, and directors earlier this
month for causing a loss of Rs 22,842
crores to a consortium of banks.
Investigation into the alleged fraud has found that the accused set up at least 98 businesses
to syphon money. According to sources, the diverted money were then utilized to build
personal assets and for the aim of loan evergreening.
(Loan Evergreening -The evergreening of loans is basically a situation wherein banks provide more
loans to the borrowers to stop them from turning into huge non-performing assets)
The critical period of the investigation is 2005-2012 , The probe has found that between
2007 and 2009, properties worth Rs. 83 crores were purchased out of security deposits
provided by ABG SL through nine related parties. Also, it was found that in March 2016,
funds worth ₹15 crore and ₹16 crore were transferred to ABG Energy by ABG SL.

Clarifying the allegations of “delay” in the probe, the agency Tuesday said that The SBI
lodged a complaint to the CBI in August 2020, however withdrawal of general consent to the
CBI investigation by certain states has made the registration of bank fraud cases more
challenging.

A lot more is sought to be uncovered, from a predicted scam that is as big as 22,000 crore.
Minuscule transactions worth 15,16 crores are being identified now. Could this turn out to
be India’s largest Bank Fraud?

Online Financial Frauds – How to Be Safe.


With significant rise in the use of digital systems over the years, there has been a rapid
increase in cyber frauds around the world. According to the RBI’s annual report, bank frauds
of ₹100,000 and above have more than doubled in value to ₹1.85 lakh crores in FY20 as
compared to ₹71,500 crores in FY19. Also, the number of such cases has increased by 28% in
the same period. Therefore to safeguard oneself, he/she/an organisation should take
certain measures like-

 Keep financial data separate


Organizations must use a separate system
dedicated to performing financial transactions
and backing up the data in an external drive regularly. Moreover, restrict or limit access to
financial information and data.
 Know who is asking
Banks never ask for personal information over the telephone, emails, or text messages.
Therefore, avoid sharing PINs, passwords, or your organization’s financial information
without proper verification.
 Keep it secret and safe
Create a strict password policy to avoid the risks of password sharing at work. Also, never
leave files containing access to the financial information in an unsecured place. Moreover,
make sure to always leave your computer locked when unattended.
 Manage user authentication
Restrict email address/IP locations to allow only authorized users to make transactions on
behalf of the organization. Make purchases only on authorized and legitimate websites and
review the organizational financial statements regularly.

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