Express News Service
When the Central Bureau of Investigation (CBI) finally registered a case against ABG Shipyard and its promoters for committing a loan fraud to the tune of Rs 22,000 crore, all hell broke loose.
It was probably the biggest loan fraud case recorded in India, and even before the CBI caught up with the promoters of ABG Shipyard, information about their financial misadventures was already in public even if not many had paid attention to it.
The resolution professional handling the Surat-based shipping company’s CIRP had detected several fraudulent transactions and had informed the same to the Ahmedabad bench of the National Company Law Tribunal (NCLT).
The resolution professional had pointed out over half-a-dozen such transactions involving over a thousand of crores.
The NCLT while ordering the liquidation of ABG Shipyard in April 2019 had agreed with the resolution professional’s findings.
Yet it took almost three years for CBI to lodge a formal FIR against the company and its promoters.
Avoidance transactions
Under the provisions of Insolvency and Bankruptcy Code (IBC), the resolution professionals are supposed to find out if promoters of a company undergoing insolvency proceedings have committed any fraudulent transactions in the past.
He/she has to then bring the same to the notice of the NCLT, which if finds merits in the findings may even order claw-back or disgorgement of value lost through such avoidance…
