ICICI Bank head Chanda Kochhar and husband on the radar of probe agencies for doubtful loans to debt-ridden Videocon Group?

Investigative agencies are honing in on dubious loans sanctioned by Chanda Kochhar

By
Team PGurus
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Investigative agencies are honing in on dubious loans sanctioned by Chanda Kochhar
Investigative agencies are honing in on dubious loans sanctioned by Chanda Kochhar

Indian investigation agencies have stumbled upon the Industrial Credit and Investment Corporation of India (ICICI) Bank CEO Chanda Kochhar and her family members’ money trail, misusing her banking channels with Videocon Group and its related firms. The agencies were acting on the directions from Prime Minister’s office on a complaint filed by an investor of both ICICI Bank and Videocon.

Evidently, Mrs. Chanda Kochhar facilitated this unscrupulous domestic offshore funding in abuse of her position as the CEO & MD.

According to the complaint filed by the investor Arvind Gupta, ICICI Bank head Chanda Kochhar in April 2012, allotted dubious loans to Videocon Group of companies of around Rs.3900 crores ($602 million) and during the period Rs.325 crores ($50 million) was transferred to her husband Deepak Kochhar’s firm NuPower Renewable Private Limited.

The complaint addressed to Prime Minister Narendra Modi and copy to Finance Minister Arun Jaitley and all investigating agencies, dated March 15, 2016, says Deepak Kochhar is the major shareholder of NuPower and was formed on a 50-50 basis shareholding by Kochhar family members and Videocon Group family members. At one point in December 2008, Chanda Kochhar was also a shareholder of NuPower, while Joint Managing Director of ICICI Bank Limited, when her mentor K V Kamath was heading the bank[1].

The detailed complaint is available at the blog of Arvind Gupta[2].

We have also reproduced the complaint in the end of the article. Given below is the essence of the complaint:

“In April 2012, just after complete transfer of ownership and control of NuPower Renewables to Kochhar’s family the ICICI Bank extended Rupee loan to various private companies belonging to the Videocon Industries Limited to the tune of Rs. 3,250 crore as per the break-up given below:

Rupee Loan of Rs. 3,250 crore to the Promoters of Videocon Group by ICICI Bank
Name of the Company Date of ICICI Bank funding Amount of loan in Rs. Crore
Trend Electronics Limited 30.04.2012 650
Century Appliances Limited 30.04.2012 650
Kail Limited 30.04.2012 650
Value Industries Limited 30.04.2012 650
Evans Fraser & Company India Limited 30.04.2012 650
Total 3,250

In addition, the helping hands of the ICICI Bank extend overseas destinations as well. The ICICI Bank extended offshore funding amounting to Rs. 660 crore to another foreign entity owned by the Videocon Group.

A Videocon Group Company based in the Cayman Islands namely Tuskar Overseas Inc. was also funded by ICICI Bank Ltd through its UK and Canada branches with a massive sum of Rs. 660 crores. The said offshore loan was backed by guarantees given by six Indian Videocon Group firms including Tek Care India Pvt. Ltd, Shree Dhoot Trading and Agencies Ltd, Value Industries Ltd and Trend Electronics Ltd.

Sir, round tripping foreign investments in Indian corporates have been a subject of a curious investigation to unearth a host of scams perpetrated by the Congress-led UPA Government. It is against this background that the Bank funding provided by the ICICI Bank to Videocon Group assumes significance. The above said banking transaction reflects a deep-rooted conspiracy on the part of ICICI Bank’s lending arrangement with the Videocon Group. Such transactions constitute Indian private sector Banking scam.

Evidently, Mrs. Chanda Kochhar facilitated this unscrupulous domestic offshore funding in abuse of her position as the CEO & MD. Chanda Kochhar’s greed of making private gains by corrupt means has resulted in wrongful losses to the ICICI Bank and the ICICI Bank’s future is in a precarious financial condition. There are  – serious risk of sticky loans extended to groups like the Videocon promoted by Venugopal Dhoot becoming NPA’s with the ICICI Bank. Mrs. Chanda Kochhar’s actions are in conflict with the interest of the ICICI Bank and deserve to be strictly dealt with by the RBI.

Furthermore, during the period between December 2010 and March 2012, NuPower Renewables also received large overseas funding aggregating to Rs. 325 crore in the form of compulsorily convertible preference shares (CCPS) from an obscure Mauritius based entity named Firstland Holdings Limited. Later in 2014, the above funding was shifted to another Mauritius based entity named DH Renewables Holding Limited.”

The eight-page complaint exposes the way how Chanda Kochar misused her position in ICICI Bank to help the debt-ridden Videocon Group and Rs.325 crore from Videocon companies landed in a company controlled by her husband Deepak Kochhar.

As per the latest Supreme Court verdict, the private bankers also come under the Prevention of Corruption Act as it at the end of the handling money of the common public. The agencies are expected to summon Chanda Kochhar and husband Deepak Kochhar and there is a great pressure on agencies from all quarters to save the powerful couple. Chanda Kochhar owes an answer why ICICI Bank pumped thousands of crores of rupees to debt-ridden Videocon Group, which was always ranked in the top list of defaulters.

The eight-page complaint filed by Arvind Gupta on ICICI Bank – Videocon Group controversial loans is published below:

Note:
1. The conversion rate used in this article is 1 USD = 64.79 Rupees.

References:

[1] Corporate governance, Mr. Narayana Murthy, Mr. K V Kamath and NDTV? Aug 18, 2017, PGurus.com

[2] Banking sector NPAs from mighty Corporate Cons? Mar 15, 2016, BankingSectorNPAs.blogspot.in

Complaint of Arvind Gupta on ICICI Bank – Videocon Loan Frauds by PGurus on Scribd

Team PGurus
Team PGurus
We are a team of focused individuals with expertise in at least one of the following fields viz. Journalism, Technology, Economics, Politics, Sports & Business. We are factual, accurate and unbiased.
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51 COMMENTS

  9. Well summarized nexus between the politicians, bureaucrats and the big businesses of indIa.
    The ruling political regime is not different from it’s predecessors.People claiming zero tolerance to Corruption are indulging in and continuing with the scams with greater speed and intensity by hoodwinking the gullible masses of indIa.
    Dharam ke naam par adharam ke kaam Karne main vayast Hain sabhi. The Supreme Court is not acting strong enough against the Corrupt.
    Everyone seems to be making hay while the sun is shining.

  12. This whole nexus of business, politics and banks are too hard to disentangle.. Modi govt is aware and is possibly playing its own game of brinkmanship.
    Reliance, Baramati (Pawar) and CHidambaram hold the bank’s control.. The PNs make it easy for the 60% foreign ownership.. The bank lost its independence the day KV Kamath came in and slowly assumed full control.. The bank was played to the market’s needs and desires and everyone including the high sounding professionals cashed on that.
    Chanda Kochar has been eased out now that the cat is out of the bag.. The enquiry will be a damp squib and life will continue with greater control and checks and all other english words… This will be like Infosys enquiry and easing out of the “bad” or rather those who were caught with pants down..
    Chanda Kochar will be assured that there will no prosecution and she can safely retire.. She has been kind and cooperative to the goons and she was amply rewarded for that.
    The case assumed prominence only because of the simmering feud between govt and business.. Reliance’ interference in govt and interest in congress coming back again had to be checked.. So a nice kind way to remind the ambanis to keep themselves restricted to business and leave politics aside is this saga…
    It is similar to putting some non descript pawn called bhujbal to roast on fire (message to pawar on what can befall on his daughter and nephew) is enough to keep pawar on the back foot..
    One can see Sibal missing from TV for three months since the cases on his buying a bunglaw from south african businessman Gupta..
    None will ever be prosecuted.. They have been possibly assured of that.. The people are the fools who believe that Modi is here as a crusader etc.. if that was the case it will not be hard with all intelligence agencies in hand to get the proof and nail them all..
    I think politics in this country has caught all parties and business together and there is no way to think that modi or anyone will clean the big piece of dirt.. The petty corruption will stop perhaps but nothing ever will happen to those who rob banks, rig markets with high speed trading etc. get public sector companies sold for a song etc..

    • Well summarized nexus between the politicians, bureaucrats and the big businesses of indIa.
      The ruling political regime is not different from it’s predecessors.People claiming zero tolerance to Corruption are indulging in and continuing with the scams with greater speed and intensity by hoodwinking the gullible masses of indIa.
      Dharam ke naam par adharam ke kaam Karne main vayast Hain sabhi. The Supreme Court is not acting strong enough against the Corrupt.
      Everyone seems to be making hay while the sun is shining.

  15. Such loans could not have been given without violation of fiduciary duties by senior bank officers and without political support. Seems there was a belief that one can do anything wrong or immoral under the UPA for the right price. Hope this government will bring the guillotine on such practices no matter who they are. Political parties should do the right thing by returning donations from parties who are proven guilty to disassociate from dishonourable conduct of others. India needs to raise its ethics level by many notches. Half baked measures will no longer do as people are no longer as forgiving as before.

  16. ICICI Bank has a so called suspense account. If you make a Flexi FD or try to transfer money from any Bank to ICICI Bank, the money may go to the “suspense” account instead of to the correct account. I suggest you all close your ICICI Bank accounts

  25. very fake clean chit by so called board of directors of ICICI

    Chairman is non-executive and rubber stamp only. She is powerful and influence whole so called board of directors …..Chanda Kochhar is only one powerful person and no director have courage to go against her…..All her director to fill quorum & they are dummy, first she resign from her post n then investigation should by NEW MD …. its funny if board of director give her clean chit….

  29. The RBI was informed about the wrong doing happening at ICICI bank in 2009 but no action was taken. The Delhi Police EOW wing has registered an FIR against ICICI bank and no action has happened despite the fact that the loan document with ICICI bank was forged by their employees to put a higher rate of interest and the same was proved by the forensic lab. It has been 10 years and no action has been taken as they are able to manage everyone by either giving them money, jobs to their relatives, provide perks to ministry officials etc etc…..The public is suffering….They also have CIBIL as a tool to arm twist and extort money by putting ou as a willful defaulter…

    • very fake clean chit by so called board of directors of ICICI

      Chairman is non-executive and rubber stamp only. She is powerful and influence whole so called board of directors …..Chanda Kochhar is only one powerful person and no director have courage to go against her…..All her director to fill quorum & they are dummy, first she resign from her post n then investigation should by NEW MD …. its funny if board of director give her clean chit….

      • In countries where enforcement is rigorous, the bank executive would have resigned immediately. Why have the shareholders not relieved her from her role until such time when she is cleared of any wrongdoing?

  31. It is 2 years since the letter was written and still Ms Kochar continues as the CMD. What is that we are talking about eradication of corruption.

    • very fake clean chit by so called board of directors of ICICI

      Chairman is non-executive and rubber stamp only. She is powerful and influence whole so called board of directors …..Chanda Kochhar is only one powerful person and no director have courage to go against her…..All her director to fill quorum & they are dummy, first she resign from her post n then investigation should by NEW MD …. its funny if board of director give her clean chit….

  32. BJP or Khangress never punished any criminal or fraudster nor they have given any recognition or acknowledgement to any honest person of integrity.

    One more scam, agencies will tire out & retire on their own or else get transferred to Ladakh or Leh. BJP is NO saint to this.

    The life or longevity of all political parties are dependent on how many criminals & fraudsters they can protect.

    • very fake clean chit by so called board of directors of ICICI

      Chairman is non-executive and rubber stamp only. She is powerful and influence whole so called board of directors …..Chanda Kochhar is only one powerful person and no director have courage to go against her…..All her director to fill quorum & they are dummy, first she resign from her post n then investigation should by NEW MD …. its funny if board of director give her clean chit….

  34. This story shows unless effective monitoring arrangements are in place, privatization of nationalized banks will not be a solution to address the miseries of banks.

  36. An ordinance similar to POTA / MCOCA {for stringently dealing with terrorists & high profile criminals} to deal with ‘fiscal dacoits’ and ‘high level well healed criminals’.
    –
    Where a PRIMA FACIE exists, the suspects
    {1} shall be forced to relinquish the positions they are holding – if they are still in service
    {2} Shall be kept under ‘house arrest’ till trial is completed
    {3} Day to day trials without adjournments by establishing ‘exclusive special courts’ shall be carried out
    {4} All the properties – movable & immovable shall be provisionally attached till completion of trial
    {5} The trials shall be in open court under video recording

  37. RBI has always been a silent spectator to all the wrongdoings in the banking sector enjoying power without responsibility. A paper tiger with highly inflated ego putting depositors money in jeopardy with low rates of interest.

  38. This lady took over as CEO in 2009. She has consistently performed poorly as is reflected in ICICi banks share price which is less than the value which prevailed in Jan 2008. But strangely her performance has never been questioned at the Board. ICICI bank has consistently let down all the stake holders through poor management and incompetent leaders.

  40. This was and must be going on .in the name of syndication of loans kick backs were being given
    Every thing must come to light .Ms Kocchar has to resign

  41. DEAR MR.SREE IYER,
    THERE IS ALSO ONE MORE COMPANY OF DHOOTS,VIZ IMP POWER LTD,WHO MANIPULATED THE SHARES OF THE COMPANY,BY USING THE MONEY RECEIVED FROM ZAMBIA ELECTRICITY COMPANY (ZESCO), BEING ADVANCE PAYMENT FOR THE SUPPLY OF 66 MV/220KV POWER TRANSFORMERS AND 20 MVA EARTHING TRANSFORMERS. THEY USED THE MONEY FOR BUYING SHARES OF THIER OWN COMPANY AND DEFAULTED IN SUPPLYING EQUIPMENT.THE MD IS MR.AJY DHOOT AND JT.MD IS MR.ADITYA DHOOT.
    THIS TOOK PLACEDUING 2002/2003.
    IN CASE YOU HAVE SOURCES,THIS ALSO MAY BE INVESTIGATED.
    BOTH ARE RELATED TO MR.VENUGOPAL DHOOT.
    REGARDS

  42. Maximum banking frauds in the world are committed by private banks. See how the co operative banks failed in india and also one Global trust bank. PSU banks are a must for india, without whose rural services, india cannot grow. As the problem with PSU banks is lending norms, let a commitee of private professionals scrutinize applications and grant a loan. In the age of digitalisation, a bank theft can be prevented and those who are propagating privatisation of banks are those who live in A/C rooms.

    • I agree with you and therefore they are able to show super normal profits and whereas our PSU banks are unable to do so….They are all cheats and crooks

  43. Banking was converted into charitable institutions long back and periodical write off of bad loans did not expose the defaulters. Now that many have defrauded banks, series of non performing assets are coming to surface. Absence of “Accountability” on Sanctioning Authority has led to this precarious condition of public money. Wherever there are frauds involving high value debtors the concerned CEOs of banks should be booked and investigated. Appointment of Executive Directors and Managing Directors by Government should be done away with and Senior Executives in GM cadre in respective banks with impeccable service record should be elevated.

  44. Great article. Modi needs to go for the jugular as far as corruption. Will he? that’s the big question. His action on corruption in the next six – eight months will be one of the defining factors of the 2019 election.

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