In March, 2018, even when a whistleblower letter unearthed one of the biggest scams in Indian banking involving the quid-pro-quo deal between Chanda Kochhar’s family and industrialist Venugopal Dhoot, the Videocon group chief maintained that he didn’t know Chanda Kochhar personally.
In one of his non-agenda meetings with a financial journalist at Mittal court office in Mumbai’s Nariman point shortly after the revelations, Dhoot vehemently denied about any links with Chanda Kochhar or the loan deal. “I don’t know her personally. My hands are clean. Let the investigators probe if there is anything amiss,” said Dhoot.
But the probe agencies didn’t buy Dhoot’s story. Probes subsequently revealed a clear quid-pro-quo deal between the two parties. The Central bureau of investigation (CBI) which filed the chargesheet in 2019 January, arrested Chanda Kochhar three years later on 23 December along with her husband Deepak Kochhar. Three days later, the agency arrested Dhoot too.
How did the scam happen?
It was a clear quid-pro-quo deal, the CBI alleged. The Videocon promoter allegedly invested crores of rupees in Deepak Kochhar-owned NuPower Renewables Pvt Ltd (NRPL) months after the Videocon Group got 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.
Subsequently, Dhoot reportedly handed over full ownership of the Joint Venture to Deepak Kochhar for a small investment some six months after the sanction of the abovementioned loan. This amounted to criminal conspiracy and cheating, the probe agency said.
What is Nupower?
NuPower was set up by Dhoot and the Kochhars as an equal JV in 2008. Dhoot-owned Supreme Energy Pvt Ltd pumped Rs 64 crore into NuPower in 2010, in the form of fully convertible debentures. Between 2008 and 2012, through multiple transactions Dhoot, who originally owned half of NuPower, transferred a majority stake to Kochhar. These transactions involved Supreme Energy, Pinnacle Energy, a trust where Deepak Kochhar was the managing trustee, and Dhoot’s associate Mahesh Chandra Punglia. Parallelly, a Mauritius-based firm, DH Renewables, also invested in NuPower.
That’s one side of the story. The loan deal is even more mysterious.
Investigators found that between June, 2008 to October, 2011, the ICICI Bank sanctioned six high value loans to Videocon group companies. The agency accused Chanda Kochhar for cheating the bank by abusing her official position as the CEO by sanctioning these loans. Later, as mentioned above, the probe revealed that this was part of a quid-pro-quo deal between Kochhars and Videocon's Dhoot.
At one point, NuPower was equally owned by Videocon and Kochhar, with each holding about 75000 shares each. This means the initial share base and investment was very small. Thereafter, when Kochhar invested Rs 1.89 crore, he received 18.9 lakh shares, taking his total to 19.72 lakh shares, whereas Videocon's remained the same. In percentage terms, Kochhar thus controlled 96 percent of the JV. Subsequently, Videocon's shareholding fell to less than three percent.
Kochhar allegedly misused her position as the top executive of the bank while sanctioning these loans. In its chargesheet, 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 borrowers and accused persons. The CBI also sought probes 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 Indian banking industry. This marked the downfall of Chanda Kochhar, who started as a junior officer in the bank and later rose through the ranks to head the company. With the arrest of all three key figures in the case—Chanda, Deepak and Dhoot, curtain has fallen for one of the most controversial scams in Indian banking.
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