The Enforcement Directorate (ED) has formally accused former ICICI Bank CEO Chanda Kochhar and
The disgraced banker’s husband Deepak Kochhar set up NuPower Renewables along with Videocon group promoter Venugopal Dhoot, just six months after the latter received a loan of Rs. 3,250 crores in 2012 from ICICI Bank.
Chanda Kochhar was on the sanctioning committee of this loan, and a number of other such high-value loans made out to Videocon Group industries. Dhoot and the Kochhars were booked by the CBI in January, owing to these loan irregularities since all of them turned non-performing assets.
The ED on Thursday confirmed what has been suspected all along: Kochhar and her family received kickbacks to the tune of Rs. 500 crore, in lieu of loans worth at least Rs. 1,575 crore, made out to Videocon by the private lender during Kochhar’s tenure.
The ED probe at a glance
The ED probe pertains to the CBI
The agency is now compiling a list of loans that were disbursed by ICICI Bank during Chanda Kochhar’s tenure as its chief, which may have been routed to her husband’s company.
The ED had interrogated the three main accused four times over the last week besides conducting multiple raids of their offices and residences. It is planning to summon other top officials who were part of the credit committee that sanctioned the loans including current ICICI managing director Sandeep Bakhshi.
The agency has unearthed several pieces of missing evidence from the money trail as well. For example, the Kochhar residence which was owned by an enterprise linked to the Videocon group between 2009 and 2016, was then transferred to Deepak Kochhar through
The IT department had flagged this web of transactions in mid-2018. The
In 2010 alone, NuPower received Rs 325 crore from Firstland Holdings, a Mauritius-based firm owned by Nishant Kanodia, who is also the son-in-law of Ravi Ruia, the co-founder and Chairman of Essar Group.
Dhoot is said to have received loans worth over Rs 1,575 crore from ICICI Bank between 2009 and 2011.
What actions has ICICI taken? Is it culpable as well?
A week after the CBI
Quoting an independent inquiry report on the allegations of loan irregularities, the bank concluded this time, that there was lack of diligence with respect to annual disclosures, saying it would treat her resignation as “termination for cause”.
This summarily cancels all of Kochhar’s increments, bonuses, medical benefits
Kochhar, 56, went on an extended leave from June 2018 before finally quitting as CEO and managing director of the bank in October, over allegations that she
But the board of ICICI Bank is to share the blame for not keeping a check on Kochhar’s sanctioning powers or compelling her to recuse herself from the committee.
The disputed loans: a timeline
According to the FIR following a CBI probe into ICICI Bank’s dealings and now corroborated by the ED, the bank had disbursed a Rs 300 crore loan to a Videocon group company, Videocon International Electronics Ltd (VIEL) in August 2009, when Kochhar was a member of loan sanctioning committee.
Within a day of the loan approval, Dhoot transferred Rs 64 crore to NuPower Renewables, managed by her husband.
The next loan was of Rs 750 crore, made out to Videocon Industries Ltd (VIL), again with Kochhar as part of the sanctioning committee.
Six such high-value loans amounting to Rs 1,575 crore were sanctioned by the Kochhar-led bank, to various Videocon companies between June 2009 and October 2011, according to CBI and the ED. They had all turned non-performing assets (NPA).
In 2012, another loan worth Rs 3,250 crore was made out to Videocon industries following a transfer back of shares from Dhoot-owned Supreme Energy to Deepak Kochhar for a relatively low amount. This loan was a part of the Rs 40,000 crore loan that Videocon received from a consortium of 20 banks led by the State Bank of India.
Whistleblower Arvind Gupta’s letter to the RBI and the Prime Minister first opened the can of worms in 2016, after which the Indian Express, in a fresh investigation, published these details in March 2018.
Why this matters
Financial fraud carried out by corporations, via shell companies, through public or private lenders, has become as commonplace as an absconding financial fugitive businessman in this country.
Sources say that her responses to the ED’s interrogation were not exactly refreshing in their honesty, and evasive at best. Experts, however, believe that it is in Kochhar’s best interests to maintain full disclosure before other members of the ICICI Bank’s loan sanctioning committee are brought in for further questioning. With the bank no longer behind her back, this may spell complications as there is no chance that Kochhar will be let off easy, going forward. Reports say that the CBI
That said, the board’s utter incompetence in curbing their former CEO’s loan sanctioning powers, and refusal to account for her crimes during the initial phase of the investigation, beg some serious questions regarding its complicity, culpability,
Prarthana Mitra is a Staff Writer at Qrius.