Chanda Kochhar, one of the most powerful figures in India’s banking and corporate circles, is probably facing one of the toughest times in her 34-year banking career.
While non-performing assets (NPAs) and Reserve Bank of India’s penalties on ICICI Bank over the past one year have troubled Kochhar, the bank’s CEO and Managing Director for nearly nine years, last week erupted a controversy alleging her of making personal gains, involving her husband Deepak Kochhar relating to loans given to Videocon Group, led by industrialist Venugopal Dhoot.
Allegations suggest Chanda Kochhar influenced the decision to give loans worth Rs 3,250 crore to Videocon as Dhoot had business dealings with the banker’s husband Deepak Kochhar’s firm NuPower Renewables.
Chanda is known to be quite an “assertive” boss but some of those who know her say she is a professional person and one who knows when to say “no”.
“Business decisions can go wrong…The only issue is that banking is based on trust...but to influence a decision of this nature, I think people are career conscious as well. She (Chanda Kochhar) is extremely professional, a person of detailing and one person who is willing to say no,” said a former executive who has worked with ICICI Bank for over 20 years.
Arvind Gupta, an ICICI Bank shareholder, who is the whistleblower and brought this matter to light through a letter seeking “appropriate investigation into illicit banking and commercial relationship between Videocon Group of Venugopal Dhoot and ICICI Bank’s MD & CEO Chanda Kochhar’s family owned NuPower Renewable Group steered by her husband Mr. Deepak Kochhar”.
Also Read: ICICI Bank-Videocon Group loan controversy raises many questions
The letter was addressed to the Prime Minister, Finance Minister and Reserve Bank of India Governor and various other investigative agencies alleging Kochhar of “amassing wrongful personal gains deceiving stakeholders, shareholders, Public / Private Sector Banks and Indian Regulatory Agencies”.
However, according to another executive, “There is a big process while giving loans, they undergo 3-4 filters before they are sanctioned. There is a risk committee, credit committee, a committee of wholetime directors, and their approval then goes to independent directors.”
According to Gupta, a CEO can obviously influence a decision. Investigative agencies need to check if this is a common practice while granting loans across corporates and banks.
Chanda has been credited with shaping the retail banking sector in India.
A successor to India’s banking mogul KV Kamath, Kochhar tipped the likes of Shikha Sharma (now chief of Axis Bank), N.S. Kannan, VIshakha Mulye (both current Executive Director at ICICI Bank), Renuka Ramnath (Founder, MD and CEO - Multiples Alternate Asset Management), and Bhargav Dasgupta (CEO of ICICI Lombard General Insurance), among others to be the ICICI Bank chief in May 2009.
Podcast | All you need to know about ICICI Bank-Videocon controversy
Currently, ICICI Bank is the largest private bank in India and also among the too-big-to-fail lenders as per the Reserve Bank of India.
To lead an institution like ICICI Bank from being a management trainee at the time of joining in 1984 puts much to her credit on bringing where the bank stands today.
Kochhar has also been conferred with Padma Bhushan, one of India's highest civilian honours, in 2011 for her contribution to India’s banking sector.
Born and brought up in Rajasthan, Kochhar came to Mumbai and graduated from Jai Hind College in 1982. After studying cost accountancy for a brief period, Kochhar completed her Master’s degree in Management from Mumbai-based Jamnalal Bajaj Institute of Management Studies.
Who is Deepak Kochhar?
It was at Jamnalal that she met Deepak, first her batchmate whom she went on to marry later.
Deepak Virendra Kochhar is the co-founder and Chief Executive Officer of NuPower Renewables which was set up in December 2008. Around that time Chanda Kochhar was the CFO and Joint MD at ICICI Bank.
NuPower Renewables was originally founded as a 50-50 JV between Videocon Group's Venugopal Dhoot family and Kochhar and Advani families (Chanda Kochhar's brother, Mahesh Advani).
Deepak Kochhar was a financial services entrepreneur before he co-founded NuPower, which has 700 MW of renewable energy assets operating (including in pipeline) located in Tamil Nadu, Karnataka, Rajasthan, Maharashtra, Andhra Pradesh and Madhya Pradesh.
He has been a Director of NuPower since December 24, 2008. The other original directors of NuPower were Venugopal Dhoot and Saurabh Dhoot.
In 2012, the company raised about Rs 300 crore from a renewable energy fund of Singapore-based private equity firm Accion Capital Management Pte Ltd in return for an undisclosed equity stake.
NuPower also borrowed Rs 750 crore from Punjab National Bank in the same year, and subsequently, borrowed funds from Axis Bank and Central Bank of India.
Whistleblower Gupta has alleged that despite Supreme Energy - owned by Videocon Group's Venugopal Dhoot - funding a sum Rs 64 crore in NuPower Renewables, its shareholding in NuPower got reduced to just 2.32 percent, whereas with the investments of only Rs 1.89 crore Deepak Kochhar acquired 92.67 per cent stake in NuPower Renewable Private Ltd.
An avid squash player with 3 national titles under his belt, Deepak is also an Alumnus of Harvard Business School - Graduate of the Advanced Management Program.
In his blog, Kochhar describes himself as one of the elite Independent Power Producers (IPP) in renewable energy. Under a subhead “His contribution to the nation” -- the blog reads, "This humble man with NuPower Renewables had a dream to eradicate the problems of electrification taking place in the rural areas of India."
To conclude, his profile says: Deepak Kochhar has done quite a lot for the country, but according to him, his work is not done yet. His words embody the famous line from Robert Frost’s poem- “The woods are lovely dark and deep, but I have promises to keep and miles to go before I sleep…”
If not miles, Kochhar indeed has a number of questions to be answered on his business dealings and the concerns raised by Gupta over his dealings with the Videocon Group. Why did Dhoot exit his business within a month and what was the nature of the business transactions with Dhoot?
While his wife has been given a clean chit by ICICI Bank's Board through a one-way communication, Deepak is yet to present his side of the story.
(With inputs from M Saraswathy and Himadri Buch)
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