Not as per law: HC orders release of Chanda Kochhar, husband in Videocon loan scam

Chanda Kochhar: At the centre of one of the biggest banking scams in India

Bombay High Court today granted bail to former ICICI Bank chief Chanda Kochhar and her husband Deepak Kochhar in the Rs 3,250-crore Videocon fraud loan case.

The court has ordered their release in a plea challenging their arrest and claiming it illegal. "Arrest not in accordance with the law," the court observed. It also asked the Kochhars to surrender their passports to the CBI.

While Chanda Kochhar has been lodged at Byculla district jail (women's jail), Deepak Kochhar was at Arthur Road jail.

Read: Rs 3,250 crore ICICI Bank-Videocon loan case: CBI arrests former CEO Chanda Kochhar, husband Deepak Kochhar

The CBI had booked the Kochhar duo and Videocon Group founder Venugopal Dhoot, along with companies like Nupower Renewables, Supreme Energy, Videocon International Electronics and Videocon Industries, as accused in an FIR registered under various IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act.

In a quid pro quo deal, the CBI alleged, Dhoot had allegedly invested crores in Nupower months after the Videocon Group got the Rs 3,250 crore as loan from ICICI Bank in 2012, the CBI had said in a statement after filing of the FIR in 2019. This amounted to criminal conspiracy and cheating, the probe agency said. Over a period of time, Dhoot had transferred the control of the company to Deepak Kochhar through multiple transactions.

Read: Nupower Renewables: What’s up with this company at the centre of Kochhar-Dhoot loan scam?

Chanda Kochhar's termination

In May 2018, ICICI Bank initiated an inquiry against its former CEO and MD Chanda Kochhar. Soon, she went on leave and later applied for an early retirement, which was accepted. The bank then said it had treated her separation as 'Termination for Cause' and had also sought approval from the Reserve Bank of India (RBI) for ending her appointment as was mandatory under the provisions of the RBI Act.

On November 10 last year, the Bombay High Court said the termination of Chanda Kochhar from the post of CEO of ICICI Bank was prima facie a “valid termination” and dismissed her interim application seeking post-retirement benefits.

Read: Why Bombay High Court validated Chanda Kochhar’s termination by ICICI Bank

A single bench of Justice RI Chagla also directed Kochhar to not deal with the bank's 6.90 lakh shares she had acquired in 2018. She was also told to disclose in an affidavit all dealings with respect to the shares within six weeks.

In its chargesheet filed in January, 2019, the CBI had said that ICICI Bank, under Kochhar, sanctioned loans to Videocon in violation of the credit policies of the bank. These loans later turned non-performing assets (NPAs) resulting in wrongful loss to the bank and wrongful gain to the borrower and the accused.

The CBI also sought probe into the role of the senior officers of the sanctioning committee which had cleared the loans to Videocon. Further, the investigative agency highlighted that the credit limit for the Videocon group companies was approved after Kochhar took over charge as top executive of the bank in May 2009.

The ICICI Bank-Videocon case is one of the most high-profile scams witnessed  by the Indian banking industry. This marked the downfall of Kochhar, who started as a junior officer in the bank , and later rose through the ranks to head the company.

Investigators found that between June 2009 and October 2011, ICICI Bank sanctioned six high-value loans to Videocon group companies. The agency accused Kochhar for cheating the bank by abusing her official position as the CEO by sanctioning these loans. Later, the probe revealed that this was part of a quid pro quo deal between Kochhars and Videocon's Dhoot.