This is a presentation related to ethical dilemma and business decisons relating to banking scams

1. RISE AND FALL OF ABGSL
Sapna Jha - M2325016
Janvi Joshi - M2325019
Siddhesh Naik - M2325026
Harsh Rane - M2325036
Aditi Tiwari - M2325050

2. Introduction & Background.
TABLE OF CONTENTS
Connection to ethical theories
and Lawrence Kohlbergs
model.
What went wrong?
Fundamental Operations.
Recommendations &
conclusion.
Legal action & Ethical
dilema

3. Introduction & Background

4. Fundamental operation
Set up a Company Borrowed Money
1985 - 1 Lakh
Scaling Up
Built small barges
Career Growth
Expanding Business
Started a unit

5. What went wrong?
 The 2008 recession
 Resulted in cancellation of orders from shipping
companies.
 Impacted trade which affected demand supply
ratio.
 80% of clients which were International were
lost.
 Even though having contracts with Indian Navy, Indian
Coastguard & Shipping Corporation of India.
 Gov. Entities like Cochin Shipyard were preferred over
others.
 To solve debt problems, owners reached to bank for loans.

6.  ICICI bank leads the consortium with the total of 28 banks.
 Banks with largest exposure to ABG fraud :
 ICICI Bank – 7089cr
 IDBI Bank – 3639cr
 SBI Bank – 2925cr
 Bank of Baroda – 1614cr
 Exim Bank of India – 1327cr
 During 2008 to 2012 the profit averages just around 185cr yet banks were willing to lend thousands of crores.
 Revenue started falling, so banks restructured the loan and eventually the company was declared NPA.
 EY was appointed by lenders in 2018 to conduct forensic investigation.
 Fund diversions were revealed, ABG shipyard had 16 shell companies.
 Loans were diverted through 98 concerned companies to create personal assets.
What went wrong?... Continued.

7. 7
LEGAL ACTION TAKEN
 According to the FIR filed by the State Bank of India (SBI), a forensic audit report
uncovered that between April 2012 and July 2017, the accused collaborated in unlawful
activities. These activities included diverting funds, misappropriation, and breaching
trust by using the funds for purposes other than those intended by the bank.
 In a major bank fraud case, the CBI has filed a case against ABG Shipyard Ltd, its
former chairman Rishi Kamlesh Agarwal, and several others. They are accused of
defrauding a consortium of banks led by State Bank of India of over Rs 22,842 crore.
The case involves allegations of criminal conspiracy, cheating, breach of trust, and
abuse of official position. The agency has also named the then executive director
Santhanam Muthaswamy, directors Ashwini Kumar, Sushil Kumar Agarwal and Ravi
Vimal Nevetia and ABG International Pvt Ltd are also named in the case.

8. 8
ETHICAL DILEMMA
 Trust and Responsibility: This stemmed from a breach of trust, as the company's leadership and employees had a
responsibility to uphold trust with stakeholders.
 Environmental Responsibility: This involved environmental violations, unethical actions can harm the environment and
local communities.
 Harm to stakeholders: Stakeholders can suffers financial losses, may lose confidence in company.
 Regulatory Compliance: Obligation to comply with relevant laws and regulations, which questions the company's
integrity and commitment to compliance.

9. Conflicted with the theory of
golden mean.
The golden mean of Aristotle is a
principle that suggests virtue lies
between extremes and that the ideal
moral behavior is found in a
moderate and balanced approach.
Connection to Ethical Therories
Immanuel Kant :
Means v/s Ends.
According to the Kantian theory the
‘means’ used to reach a certain end
goal matter, not the end goal itself.

10. Connection to Ethical Therories & Lawerence
Kohlbergs model
Connection with Pre-
conventional level stage-2
& Post-conventional level
stage-5.
Followed the Ego-based
principle.

11. Corporate Governance Issue
 No Transparency
 Manipulation
 No Fairness
 Not Accountable

12. Recommendations
 Proper Due Diligence
 Strong Authentication
 Proper Documentation
 Regular Monitoring
 Cross Verification

13. Conclusion
 Shipping Business is one of the most
risky business hence proper Rules and
regulation needs to be there to avoid
frauds.
 Banks need to take proper due
diligence and proper documentation
before lending any money to
companies.

14. Thank
You!