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