Kochhar has now sought an early retirement and the bank has accepted her resignation.
NEW DELHI: In 1984, Chanda Kochhar joined ICICI as a management trainee and 25 years later became the MD & CEO. Almost a decade after her ascension to the top, she has tumbled down under the weight of serious allegations of misconduct and corruption and a CBI inquiry that followed.
Kochhar has now sought an early retirement and the bank has accepted her resignation. At the centre of the storm is Kochhar's husband Deepak Kochhar, whose company NuPower Renewables allegedly received a an investment from a Videocon group company as a quid pro quo for a loan from the bank.
How it all began
The Videocon loan issue was first raised by whistle-blower Arvind Gupta in 2016 when he wrote about it on a blog. He accused Kochhar of conflict of interest and corporate misconduct while sanctioning loans to the Videocon group.
File photo of Arvind Gupta the whistle-blower
He wrote to the Prime Minister, the Reserve Bank of India governor and several other authorities demanding a probe but. However, his complaint drew no response from the authorities. The issue came to the limelight when early this year a newspaper published an investigation of Gupta's allegations. Initially, ICICI Bank denied that there were any irregularities in the loan given to Videocon and backed Kochhar.
Then ICICI Bank chairman MK Sharma also stated that Kochhar had made all necessary disclosures. But in May this year, the board decided to probe an anonymous whistle-blower's complaint against Kochhar in the Videocon case. Below is the allegations and revelations against Kochhar that came in over the last few months:
What was the Videocon deal?
ICICI Bank had granted a Rs 3,250 crore loan to Videocon Industries in 2012. The Videocon loan later turned a non-performing asset. Gupta alleged that loan was given due to business relations between Kochhar's husband Deepak Kochhar and the Videocon Group.
Preliminary inquiry
In April, the CBI registered a preliminary inquiry to probe alleged nexus between Deepak Kocchar and Videocon chairman Venugopal Dhoot, though she herself was not named in the inquiry. The inquiry was to ascertain the veracity of accusations against Dhoot and Deepak Kochhar that Dhoot provided crores of rupees to a firm promoted by Deepak Kochhar six months after Dhoot's group got Rs 3,250 crores as loan from ICICI Bank. The said amount was a part of a loan of Rs 40,000 crores which Videocon received from a consortium of 20 banks led by State Bank of India.
Kochhar-Dhoot linkage
Whistle-blower Gupta alleged that a company owned by Videocon chairman Dhoot loaned Rs 64 crore in March 2010 to NuPower Renewables that he and Deepak Kochhar had jointly promoted just two year ago. A complex web of deals resulted in a trust controlled by Deepak Kochhar acquiring the lending company six months after the Videocon Group got the loan from ICICI Bank. The transfer of company shares to Kochhar’s trust was made at a paltry Rs 9 lakh.
So a company that loaned an amount as big as Rs 64 crore, was acquired by the trust Deepak Kochhar controlled for as small an amount as Rs 9 lakh. This was the part that raised the eyebrows.
Dhoot also sold his 50 per cent stake in NuPower Renewables for just Rs 2.5 lakh to Deepak Kochhar. Gupta alleged that ICICI Bank awarding the loan to Videocon and the loan later becoming an NPA in 2017 were due to Dhoot's business relations with Deepak Kochhar whose wife, Chanda, was part of the committee that sanctioned the loan. Nearly 86 per cent of Videocon's ICICI Bank loan remains unpaid.
The Avista angle
It also came to light that ICICI Bank borrowers, including Jaiprakash Associates and Jaiprakash Power, had hired services allegedly of a firm, Avista Advisory Group, run by Chanda Kochhar's brother-in-law Rajiv Kochhar (brother of Deepak Kochhar). Among the companies that are said to have hired services of Avista for restructuring of debt were Videocon, GTL Infrastructure and Suzlon. ICICI Bank was a lender to all these entities. However, the bank denied that it had ever engaged Avista Advisory Group for any services. Earlier, the bank said that the brother of a husband did not fall within the definition of a “relative” under the Companies Act and, therefore, there was no requirement for making any disclosure of such a relationship.
The property angle
Chanda Kochhar's house too has come under the lens. The Income Tax department is probing the acquisition of the current family residence of Kochhar in South Mumbai by her husband Deepak Kochhar in a complex transaction involving firms linked to Videocon Group, The Indian Express reported in June.
The house was bought through Credential Finance Ltd, a financial services firm set up by Deepak Kochhar and his brother Rajiv Kochhar in the mid-1990s. The company had intricate relations with the Videocon group, the report said.
Now all property dealings by the Kochhar family since Chanda Kochhar took over as the CEO are under the lens .An inquiry instituted by the bank under retired Supreme Court judge Justice BN Srikrishna was asked to probe the property angle. The bank has asked Srikrishna to examine whether properties and assets acquired by the Kochhar family since she took over as CEO were purchased at concessional or lower than prevailing market prices.
He will also look into possible banking relationships and the terms of loans or banking facilities enjoyed by builders or sellers of these assets with ICICI Bank. Justice Srikrishna's report is expected to come next month.
Mauritius connection of NuPower
Whistle-blower Gupta has also alleged that NuPower received what he described as round-tripped investments of Rs 453 crore from Essar Group, routed through an organistion called Matix Group and its holding entity Firstland Holdings Ltd, both based in Mauritius.
These firms are owned by Nishant Kanodia, husband of Smiti Ruia, who is daughter of Essar Group Ravi Ruia. ICICI Bank is a key lender to Essar Group and during the same period, it lent to Essar’s now-bankrupt US steel project in Minnesota and its UK refinery project at Stanlow. However, The allegations have been dismissed as motivated by the Essar Group, which maintains it has no business interest in Firstland Holdings.
Sale of ICICI bank building
The Income Tax department are probing a 2010 real estate transaction between ICICI Bank and Videocon Group as part of its investigation into possible tax evasion in the ICICI Bank-Videocon loan case, The Indian Express reported.
The sale of a 13-storey building, Radhika Apartments, which was earlier the staff quarters of ICICI Bank, in Prabhadevi in central Mumbai to Videocon Industries has come under the scanner following allegations of possible quid pro quo. It was allegedly sold to Dhoot’s firm at a much lower price than the existing market rate at that time.
Inflated profits?
ICICI Bank is also probing allegations of irregularities in 31 loan accounts raised in a whistle-blower complaint. There are allegations that ICICI Bank inflated profits by at least $1.3 billion over eight years by delaying provisioning for 31 non-performing asset (NPA) accounts.
The whistle-blower alleged that the bank delayed provisioning for NPAs from loans worth at least $3 billion. The whistle-blower claimed that the bank would have reported losses in some quarters over the eight years, had the bank’s management not deferred impairment of loans.
Photos has been added to show the concerned persons.
Used here for educational purposes only.
No comments:
Post a Comment