Home Business Essar promoter kin’s firm invested in Chanda Kochhar husband’s company

Essar promoter kin’s firm invested in Chanda Kochhar husband’s company

NuPower, promoted by Deepak Kochhar, husband of Chanda Kochhar, between 2010 and 2012 got investments of Rs 325 crore from Mauritius-based Firstland Holdings, a company owned by Nishant Kanodia, son-in-law of Essar Group co-founder Ravi Ruia.

ICICI MD and CEO Chanda Kochhar (Express photo by Nirmal Harindran/File)

While investigating agencies are probing investments by a Mauritius-based company into NuPower Renewables, the company promoted by Deepak Kochhar, husband of Chanda Kochhar, MD and CEO of ICICI Bank, between 2010 and 2012, records of the Registrar of Companies show that NuPower got investments of Rs 325 crore from Mauritius-based Firstland Holdings, a company owned by Nishant Kanodia, son-in-law of Essar Group co-founder Ravi Ruia.

The investments from Ruia’s son-in-law’s firm into NuPower started in December 2010. Incidentally, the same month ICICI Bank was lead banker in a consortium of Indian banks that extended a $530-million loan to Essar Steel Minnesota LLC on December 29, 2010. This loan was later classified as NPA.

Consider the sequence of events:

* December 29, 2010: ICICI Bank, as mandated lead arranger, extended loan of $530 million to Essar Steel Minnesota LLC on behalf of the consortium

* December 31, 2010: Firstland Holdings invested Rs 49.90 crore in NuPower.

* August 3, 2011: Firstland invested Rs 8.69 crore in NuPower

* October 3, 2011: Firstland invested Rs 99.25 crore in NuPower

* March 21, 2012: Firstland invested Rs 166.5 crore in NuPower

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Responding to queries, Kanodia’s office said, “Firstland Holdings had made investments in NuPower in 2010 and 2011. This investment was sold in 2013 to a private equity fund and Firstland recovered its full investment.” The company added: “None of the Kanodia group companies have any loans from ICICI.”

In its response, Essar Group said it had “not made any investments in Firstland or NuPower.” Records show that Essar Capital Holdings Limited did invest Rs 163.54 crore in Matix Chemicals and Fertilisers, a subsidiary of Firstland Holding. This came in tranches: Rs 96.76 crore in December 2010 and Rs 66.78 crore in August 2011.

Asked about these, an Essar Group spokesperson said, “Essar entities have business dealings with Matix Fertilizers and Chemicals Ltd. on arm’s length basis, and these have no connection whatsoever with NuPower.”

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While ICICI Bank did not respond to a specific query on whether Chanda Kochhar informed the board about her husband’s financial dealings with kin of Essar Group promoters and if she recused herself from the loan approval process, it said, “With regards to your query on Essar Steel Minnesota, we would like to inform you that a consortium of seven Indian banks including ICICI Bank had sanctioned loans to the entity. Also, large US funds gave loans to the company. Out of the total debt of the company of USD 1.02 billion, ICICI Bank’s share was less than 25%. Due to various factors, the loan facilities provided to this project were classified as nonperforming by all lenders. The resolution process pursuant to the same is under process.”

It also said: “We categorically state that ICICI Bank has never sanctioned any loan to Matix Fertilisers and Chemicals Ltd.” Queries sent to NuPower did not elicit a response.

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