Has the law has finally caught up with high-profile banker Chanda Kochhar and industrialist Venugopal Dhoot? Both, along with Deepak Kochhar, husband of Ms Kochhar Videocon International Electronics Ltd (VIEL), Videocon Industries Ltd (VIL) and NuPower Renewables Ltd (NRL) and Supreme Energy Pvt Ltd (SEPL) have been named in a 10-page first information report (FIR) filed by Central Bureau of Investigation (CBI) for cheating and defrauding ICICI Bank to the tune of Rs1730 crore. This follows a series of raids conducted by the CBI yesterday.
Breaking down its case against them, CBI had detailed the modus operandi and charges against all those involved in this alleged fraud and cheating of the private sector lender. It remains to be seen if it is able to prove all these charges.
According to the investigation agency, Ms Kochhar abused her official position and perpetrated a major fraud in conjunction with her husband Deepak and has been conniving with Mr Dhoot of Videocon at every twist and turn to benefit her husband. The FIR reveals how various loans given to Videocon group companies became non-performing assets (NPAs) for ICICI Bank when it was headed by Ms Kochhar.
CBI says during June 2009 to October 2011, ICICI Bank sanctioned six high value loans to various group companies of Videocon. "On 26 August 2009, a rupee term loan (RTL) of Rs300 crore was sanctioned to VIEL in contravention of the rules and policy by the sanctioning committee. Ms Kochhar was one of the members of the sanctioning committee, who in criminal conspiracy to cheat ICICI Bank and in pursuance of criminal conspiracy on 26 August 2009, dishonestly by abusing her official position sanctioned the loan in favour of VIEL. It is further revealed that on 7 September 2009, this loan was disbursed to VIEL. On very next day, i.e. on 8 September 2009, Mr Dhoot transferred Rs64 crore to NRL managed by Mr Kochhar, husband of Ms Kochhar, from VIL through his company SEPL. This was the first major capital received by NRL to acquire its first power plant. Thus Ms Kochhar got illegal gratification/ undue benefit through her husband from VIL/Mr Dhoot for sanctioning RTL of Rs300 crore to VIEL," the FIR says.
NRL was set up on 24 December 2008 and had Mr Kochhar, Mr Dhoot and Saurabh Dhoot as its first directors. On 15 January 2009, both the Dhoots resigned from the directorship of NuPower. However, before resigning, Mr Dhoot, the chief of Videocon group, allotted 19.97 lakh warrants to Mr Kochhar at Rs10 per warrant on an initial payment of Re1 per warrant. On 5 June 2009, shares of NuPower, held by the Videocon group chief and Deepak Kochhar group (Pacific Capital Services Pvt Ltd) were transferred to SEPL, which then became 95% stakeholder in NRL.
Supreme Energy was incorporated on 3 July 2008 with Mr Dhoot and his associate Vasant Kakade were the company's first directors. On 15 January 2009, Mr Dhoot resigned from the directorship and subsequently transferred control of the company to Mr Kochhar by selling or transferring his shares to Pinnacle Energy Trust managed by Mr Kochhar.
According to the FIR, between 2009 to 2011, ICICI Bank sanctioned loans to various group companies of Videocon. This includes, RTL of Rs175 crore to Millennium Appliances India Ltd (MAIL) on 30 June 2009, Rs240 crore to Sky Appliances Ltd (SAL) on 17 November 2010, Rs110 crore to Techno Electronics Ltd (TEL) on same day, Rs300 crore to Applicomp India Ltd (AIL) on 30 May 2001 and Rs750 crore to Videocon Industries on 31 October 2011.
"Loans sanctioned to SAL, TEL and AIL were for enabling them to repay unsecured loan availed from Videocon Industries. Further, a loan was also sanctioned to Videocon Industries for refinancing existing loans of the company. These loans were sanctioned in violation of credit policy of ICICI Bank during the relevant period. These loans of Rs1575 crore were sanctioned on various dates by various committees having senior officials of ICICI Bank as members, such as Sandeep Bakshi, K Ramkumar, Sonjoy Chatterjee, NS Kannan, Zarin Daruwala, Rajiv Sabharwal, KV Kamath and Homi Khusrokhan. These loans have turned non-performing assets (NPAs) resulting in wrongful loss to ICICI Bank and wrongful gains to the borrowers and the accused persons. The role of these senior officers of the sanctioning committee may also be investigated. ICICI Bank had also released the security available in the form of FDR of Rs50 core in the account of Sky Appliances, and Techno Electronics, without any justification," the FIR filed by CBI says.
On 26 April 2012, existing outstanding of the six accounts were adjusted in RTL of Rs1,730 crore sanctioned under refinance of domestic debt. The account of Videocon Industries and its group companies were declared NPA on 30 June 2017.
CBI has charged the Kochhars, Mr Dhoot, Videocon group companies and companies controlled by Mr Kochhar with offences punishable under Section 120B (conspiracy) and 420 (cheating) of IPC, section 7 (taking gratification) and 13(2) (criminal misconduct) read with 13(1)(d) (pecuniary advantage) of the Prevention of Corruption Act.
The original preliminary enquiry (PE) was registered by CBI on 8 December 2017 on allegations that ICICI Bank had sanctioned credit facilities of about Rs3,250 crore to Trend Electronics Ltd, Century Appliances Ltd, Kail Ltd, Value Industries Ltd and Evan Fraser and Co India Ltd, belonging to the Videocon Group promoted by Mr Dhoot.
The officials of ICICI Bank sanctioned credit facilities to these companies in violation of the Banking Regulation Act, Reserve Bank of India (RBI) guidelines and credit policy of the lender.
It was also alleged that as a part of the quid-pro-quo, Mr Dhoot made an investment of Rs64 crore in NuPower Renewables (NRL) through Supreme Energy Pvt Ltd (SEPL) and also transferred SEPL to Pinnacle Energy Trust managed by Mr Kochhar through a circuitous route between 2009 to 2012.
Incidentally, Chanda Kochhar took over the charge as MD & CEO of ICICI Bank on 1 May 2009 and the credit limits to Videocon group companies were sanctioned when she was at the helm of the lender.
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