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Ex NSE Cheif Chitra Ramkrishna Arrested By CBI – Top Indian Market News

Ex NSE Cheif Chitra Ramkrishna Arrested By CBI

The former National Stock Exchange (NSE) chief Chitra Ramkrishna has been taken into custody by the Central Bureau of Investigation(CBI). She has been arrested for taking huge decisions under the influence of a ‘Himalayan Yogi’. According to sources, the Himalayan Yogi was revealed to be Anand Subramanian, former Group Operating Officer (GOO), also arrested by the CBI. Moreover, sources say that Chitra refused to ‘recognise’ Anand Subramanian when the CBI interrogated the two together.


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As global oil prices surge, Indian Rupee hits lifetime low

The Indian Rupee has hit the lowest ever since the global oil prices have surged. The Indian National Rupee(INR) trades at Rs 76.96 per US Dollar(USD). Global oil prices have surged at an all-time high since the 2008 global financial crisis where Brent Crude was trading at $124 per barrel and WTI Crude at $123 per barrel. 

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PVR and Cinepolis in talks for a merger

According to an Economic Times report, Leading cinema chain PVR and the Indian unit of Mexican company Cinepolis are in advanced talks for a merger. According to a Business Today report, the merged entity will be valued at Rs 13,500 crore.

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NSE faces technical glitch, Investors complain

On March 07, the National Stock Exchange(NSE) faced a technical glitch in the early hours where it stopped reporting an issue with data feeds for NSE stocks. “There is an issue with data feeds for NSE stocks from the exchange across all members. Please check 20 market depth before placing orders or place orders on BSE” said India’s leading brokerage firm in a tweet. The glitch was resolved and Zerodha confirmed it in a tweet.


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JSW to supply 240MW hydropower to Haryana, signs PPA

JSW Steel Ltd has entered a Power Purchase Agreement(PPA) with the Haryana Power Purchase Centre (HPPC) to supply 240 MW from Hydro Power. The agreement is valid for 35 years (with further extension at mutually agreed terms), and signed at a levelised ceiling tariff of Rs 4.50 per kWh (kilowatt-hour).

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Zydus gets DCGI nod for drug to treat anemia associated with chronic kidney disease.

Pharma major Zydus Zydus Lifesciences has received approval for its New Drug Application (NDA) from the Drug Controller General of India for Oxemia (Desidustat), a first-of-its-kind oral treatment in India for anaemia associated with Chronic Kidney Disease (CKD).

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Noida-based India Exposition Mart Files DRHP for Rs 600 crore IPO. 

Noida-based India Exposition Mart had filed a Draft Red Herring Prospectus with SEBI for an IPO to raise Rs 600 crore. The issue shall consist of fresh issue of equity shares aggregating up to Rs 450 crore and an offer-for-sale (OFS) of up to 11,210,659 equity shares by existing shareholders.

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Agri and Processed Food Export Up 23% in Apr-Jan 2021-22

Exports of agricultural and processed food products have grown by 23% YoY to USD 19.7 billion during April-January 2021-22 according to Ministry of Commerce and Industry. Rice was the top forex earner that earned nearly USD 7.7 billion. Meat, dairy and poultry products exports grew over 13 per cent to $3.40 billion within 10 months in the current fiscal year

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Mumbai-based Suraj Estate Developers filed DRHP for Rs 500 crore IPO

Suraj Estate Developers has filed a draft red herring prospectus (DRHP) for an IPO to raise around Rs 500 crore. Suraj Estate Developers holds a 15.25 per cent share in terms of the number of units supplied in the suburban areas of Mumbai including Mahim, Matunga, Dadar, Prabhadevi and Parel region between CY2016-21. The company reported a net profit of Rs 11.9 crore with a total revenue of 109.62 crore in the seven months ended October 31, 2021.

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Editorial

The ABG Shipyard Bank Fraud: All You Need to Know

The Central Bureau of Investigation (CBI) has unearthed what is deemed to be India’s largest-ever case of bank fraud. The agency has booked ABG Shipyard Ltd, its former chairman, and other officials for allegedly defrauding a consortium of banks of over Rs 22,842 crore! In this article, learn all about the ABG Shipyard Ltd bank fraud case.

The Story

ABG Shipyard Ltd (ABGSL) is one of India’s largest firms engaged in shipbuilding and ship repair. It operates shipyards at Dahej and Surat in Gujarat. The company has the capacity to build vessels up to 18,000 dead weight tonnage (DWT) at Surat Shipyard and 1,20,000 DWT at Dahej Shipyard. The Mumbai-based firm has built over 165 vessels over the past 16 years.

  • ABG Shipyard’s loan account was first declared as a non-performing asset (NPA) in July 2016. An NPA is a loan for which the principal or interest payment remained overdue for a period of 90 days.
  • A January 2019 forensic audit report by EY revealed that ABGSL was involved in a number of illegal activities. The audit looked at transactions between April 2012 and July 2017 conducted by ABG Shipyard, its subsidiaries, and vendors. A review of ledgers showed that funds were being transferred between ABG Group companies.
  • The National Company Law Tribunal (NCLT) had ordered the liquidation of ABGSL in April 2019 under the Insolvency & Bankruptcy Code (IBC). In November 2019, State Bank of India (SBI) filed its first complaint against ABGSL.

Recent Developments

  • The CBI acted on SBI’s second complaint (filed in August 2020) after scrutinising for over one and a half years on the complaint’s FIR on February 7, 2022. 
  • On February 12 (Saturday), the CBI booked ABG Shipyard Ltd and its directors for allegedly defrauding 28 banks to the tune of Rs 22,842 crore. The company has been accused of criminal conspiracy, cheating, and criminal breach of trust. The agency also alleged that ABGSL’s directors have abused their official position under the Indian Penal Code (IPC) and the Prevention of Corruption Act. This could be the biggest bank fraud case in the history of India.
  • It was noted that funds received as bank loans were diverted and misappropriated. They had breached terms of its corporate debt restructing. As per reports, ABG Shipyard owes Rs 7,089 crore to ICICI Bank, Rs 3,639 crore to IDBI Bank, Rs 2,925 crore to SBI. It also owes Rs 1,614 crore to Bank of Baroda and Rs 1,244 crore to Punjab National Bank, among others.
  • The CBI conducted searches at the premises of the private company and its directors at Surat, Bharuch, Mumbai, and Pune. This led to the recovery of incriminating documents.

What Next?

India’s public and private sector banks, which continue to give loans to large corporates and wealthy entities, end up incurring huge losses. People also tend to forget that it is common taxpayers’ money that has been deposited or infused into these banks. We find that there is no sense of accountability or transparency in their activities.

ABGSL has now been referred to the Ahmedabad bench of the NCLT by ICICI Bank for Corporate Insolvency Resolution Process. The investigation related to the scam is underway. We would be able to receive more clarifications from the CBI in the days to come. Will the accused be lawfully punished for their fraudulent activities or will they be able to escape from all charges? Let us wait and watch.

Categories
Editorial

The Rs 8,000 Crore Scam at SBI, Canara Bank: Explained

The public sector banks of our country have fallen prey to another major scam. The State Bank of India and Canara Bank had filed separate cases against two private firms for alleged bank fraud of over Rs 8,000 crore!

We know that banks are the backbone of any economy. When such fraudulent activities occur frequently in our banks and financial institutions, it causes major harm to India’s economic growth. Moreover, it affects the lives of common citizens. Let us take a closer look at the important details surrounding this latest scam.

The Canara Bank Fraud Case

A consortium of 14 banks, led by Canara Bank, had lent over Rs 7,926 crore to a Hyderabad-based company known as Trannstroy (India) Ltd. The company deals in the construction of highways, bridges, irrigation projects, and metro-related work. They are also in the oil and gas business.

In a detailed filing to the concerned legal authorities, Canara Bank alleged that Trannstroy Ltd had availed credit facilities using multiple banking arrangements. This refers to when a borrower avails loans independently from more than one bank. There is no contractual relationship between the various bankers of such borrowers.

The lender alleged that Trannstroy was involved in falsification/fabrication of books of accounts, hiding of stock statements, and tampering with its balance sheet. Canara Bank also alleged that the private firm misappropriated its funds and diverted the loan amount sanctioned by the consortium. Transstroy (India) Ltd had caused a loss of around Rs 7,926.01 crore to Canara Bank and other member banks. The account had to be declared as a non-performing asset (NPA). 

It is surprising to know that this case was referred to the National Company Law Tribunal (NCLT) and was admitted by NCLT Hyderabad on October 10, 2018! The company was declared as a wilful defaulter by Canara Bank on December 26, 2018, more than two years ago!

Recent Developments

On December 19, 2020, the Central Bureau of Investigation (CBI) registered an FIR against Transstroy (India) Ltd and its Chairman & Managing Director (CMD), Cherukuri Shridhar Sridhar. The CBI has also booked the firm’s Additional Directors Rayapati Sambasiva Rao and Akkineni Satish, and some unknown public servants. One of the accused, RS Rao, is a former Telugu Desam Party MP. The investigation agency conducted raids at the premises of the private company and the offices/homes of the accused members at Hyderabad and Guntur and found necessary documents.

On the same day, Canara Bank issued a clarification on the details regarding the alleged fraud by Transstroy (India) Ltd. The lender stated that its share in the amount lent by the consortium of 14 banks stood only at Rs 678 crore. The bank had also made 100% provisions for the same, as per the RBI guidelines. 

The SBI Fraud Case

The details of the scam which occurred at the State Bank of India are very similar to that of Canara Banks’. SBI had filed a complaint of fraud of Rs 313.79 crore against Agnite Education Ltd. It is a Chennai-based edtech firm that primarily offers e-learning courses.

The bank has alleged that Agnite Education, represented by its Chairman & Directors, availed loans of about Rs 310 crore from SBI. The loan amounts were diverted to accounts of related parties, and has been marked as a non-performing asset(NPA). This led to SBI incurring a loss of Rs 313.79 crore.

On Saturday (December 19), the CBI registered cases against Agnite Education Ltd, its Chairman K Balasubramaniam, Director K Padmanabhan, some unknown public servants, and others. The agency had also conducted raids at the firm’s office in Chennai and found substantial evidence.

Conclusion

The scams related to our banks and financial institutions continue to occur in India. Over the past few years, we have noticed that SBI and other PSU Banks have reported the most number of fraudulent accounts or loan defaulters. The public sector banks, which continue to give loans to big corporates and wealthy entities, end up incurring huge losses. The people who manipulate and deceive these lenders manage to safely escape from India as well. Nirav Modi and Vijay Mallya are just two out of the many prominent business figures who have been convicted of thousands of crores of bank fraud. These entities always find a way to evade the law.

At the same time, people from low-income groups do not get essential loans for their life-sustaining activities. Farmers are having a tough time securing funds for their agricultural activities. If a common man is not able to pay off their loans, banks end up acquiring their properties which had been kept as collateral. In many cases, they are further penalised and even beaten up by goons. People also tend to forget that it is the common taxpayers’ money that has been deposited or infused into these public sector banks. We find that there is no sense of accountability or transparency in their activites.

Fortunately, both SBI and Canara Bank had made 100% provisions against their respective fraud accounts. The investigation related to both scams is underway. We would be able to receive more clarifications from the CBI in the days to come. Will the accused be lawfully punished for their fraudulent activities, or, will they be able to escape from all charges? Let us wait and watch.