According to sources close to the investigation, EY will likely be a crucial prosecution witness in the case against ABG Shipyard, which has been charged by the CBI with defrauding banks of over Rs 22,482 crore.
The London-based professional services firm conducted a forensic audit of ABG Shipyard and submitted its findings in January 2019 to a group of 28 banks accused of being defrauded by the Surat-based shipbuilder in the country’s largest bank scam.
In November 2019, a Mumbai branch of the State Bank of India petitioned the CBI, requesting the filing of a corruption case based on the audit report.
The agency, on the other hand, returned the complaint to the bank, asking for more information. The agency also requested a list of witnesses from SBI Mumbai. In a new complaint filed in September 2020, the bank named EY and the general manager of its Mumbai branch as prosecution witnesses.
According to sources close to the investigation, the audit report will be studied, and CBI officers who conducted the audit may be questioned.
The audit report will also be evaluated to see if any lapses were detected, according to the sources. “The agency will decide who will be prosecuted and who will be called as a witness based on the evidence and the role of individuals involved,” one of them added.
EY has noted “possible circular transactions,” violations of corporate debt restructuring (CDR) granted by banks in 2014, and “potential diversion” of funds by ABG Shipyard in its audit report, a portion of which was copied in CBI’s FIR.
One of the stipulations of the CDR agreement, according to the audit report, was that all financial inflows be channeled through a trust and retention account (TRA). However, it was discovered that non-TRA accounts included potential client receipts, according to the report.
It claimed that bank loans were “possibly routed” to two organizations connected to ABG Shipyard, one of which was domiciled in Singapore. The audit also mentioned “indications of assets purchased by related/linked parties” with ABG Shipyard funding.
According to the report, “it appears that properties were purchased out of security deposits made by ABG Shipyard Ltd during the same year” based on a review of financial documents for seven firms for the financial year 2007-08.
According to ET on Monday, the CBI will focus on the suspected involvement of “public authorities” in Top bank executives who are considered public servants. Their possible involvement is significant because the complainant bank told the CBI that it has no reason to believe its employees were involved in the crime .e bank fraud.
Follow and connect with us on Facebook, LinkedIn&Twitter
