ICICI Bank CEO Chanda Kochhar. Photo: Abhijit Bhatlekar/Mint
Mumbai: Capital markets regulator Securities and Exchange Board of India (Sebi) has started proceedings against ICICI Bank Ltd for non-disclosure of information in the alleged issue of conflict of interest in granting loans to Videocon Group.
On Friday, ICICI Bank informed the National Stock Exchange (NSE) that Sebi has sent it a notice alleging violation of Listing Obligation and Disclosure Requirements (LODR) and for making adequate disclosures.
Mint had on 12 April reported that Sebi was probing alleged corporate governance and disclosure lapses at the bank.
“The notice has been issued based on information furnished by the bank/its MD and CEO (Chanda Kochhar) to diverse queries made by Sebi concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group and NuPower (Renewables), an entity in which Deepak Kochhar, spouse of MD and CEO, has economic interests,” said ICICI Bank in a disclosure to NSE.
The Videocon loan case pertains to alleged conflict of interest in a Rs3,250 crore loan ICICI Bank gave Videocon Group. The amount was part of a Rs40,000 crore loan by a consortium of 20 banks in 2012.
Dhoot allegedly gave Rs64 crore in 2010 through a fully-owned entity to NuPower Renewables, which he set up with Deepak Kochhar and two of his kin. It is alleged that he transferred proprietorship of the firm to a trust owned by Deepak Kochhar for Rs9 lakh six months after he received the loan from ICICI Bank.
However, M.K. Sharma, chairman of ICICI Bank, on 29 March said there is “no conflict of interest as Videocon Group is not an investor in NuPower Renewables”.
According to J.N. Gupta, co-founder and managing director of Stakeholder Empowerment Services (SES), Sebi can seek information in case the disclosure is not adequate.
“The moot question is whether the alleged disclosure lapses happened in 2012 when the provisions of LODR 2015 were not notified or do they pertain to some lapses today,” said Gupta.
One of the allegations against the bank is restructuring Videocon loans through a firm that appears to be a related party. In 2012, Related Party Transactions (RPT) were not defined either by the Companies Act or Sebi norms, but there was a concept of person of interest (to the company management).
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