Videocon loan case: Srikrishna panel indicts Chanda Kochhar; what we know so far

Read: Hurt and shocked by termination, penalties: Chanda Kochhar

Kochhar, the first woman CEO of a bank in the country, also said she served the ICICI group for 34 long years "with all my dedication and hard work" and the bank's latest decision has caused her "immense hurt and pain".

The bank board has also decided to revoke all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested and unexercised stock options, and medical benefits.

Here's a roundup of what we know so far:

What did the Srikrishna enquiry panel say?

A panel headed by Justice BN Srikrishna has found the actions of ICICI Bank former MD and CEO Chanda Kochhar in the Videocon loan case in violation of the bank’s code of conduct.

The report found that "Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations".

The committee report concluded that there was a lack of diligence with respect to annual disclosures as required by the bank in terms of its internal policies and violation of Code of Conduct and applicable Indian laws.

When did the issue come into the light? 

The issue of alleged irregularities in loans came into light in October 2016, after a shareholder whistleblower Arvind Gupta raised concerns through a blog. He also alleged that Chanda Kochhar influenced an Rs 3,250-crore loan to the Venugopal Dhoot-led Videocon group in 2012 in return for a deal in NuPower Renewables and Supreme Energy, a clean-energy firm run by her husband Deepak Kochhar.

Read: Opinion | Kochhar indictment a wake-up call for boards and victory for whistleblowers

Gupta wrote to the Prime Minister, the RBI governor and several other authorities demanding a probe. His complaint, however, gathered no attention.

The issue gained attention last year in March when another unnamed whistleblower complained against the bank and its top management, including Kochhar, alleging a deliberate delay in recognising impairment in 31 loan accounts between 2008 and 2016 to save on provisioning costs.

These allegations led to probes by multiple agencies, including the CBI, ED and SFIO, and also questioning of the Kochhar family members.

What was the bank's response in the past? 

At the end of March 2018, the bank stated that it had reviewed internal processes for credit approval and 'found them to be robust'. Later, the bank's board also expressed full faith in Kochhar, denying any wrongdoing on her part and ruling out any ‘conflict of interest’.

However, after a second whistleblower complaint emerged, the board changed its stance and instituted an independent enquiry. In June 2018, it appointed retired Supreme Court judge Justice BN Srikrishna to head the independent panel initiated by ICICI Bank’s board.

Subsequently, on October 4 ICICI Bank board accepted Chanda Kochhar's request to seek early retirement. The bank said that the enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry.

What has CBI found so far?

The CBI had also registered an FIR against Kochhar's husband Deepak Kochhar and Videocon group MD Venugopal Dhoot over alleged irregularities in loans sanctioned by the bank to the group in 2012.

The CBI is carrying a full-blown investigation. It has conducted searches at Videocon's headquarters in Mumbai and offices in Aurangabad on January 24. The offices of Nupower and Supreme Power, companies operated Kochhar's husband Deepak Kochhar, were also searched by the investigation agency. However, a charge sheet is yet to be submitted by the CBI.

Read: Here is how much Chanda Kochhar owes ICICI Bank

The investigating agency also named Videocon group MD Venugopal Dhoot, companies Nupower Renewables, Supreme Energy, Videocon International Electronics Ltd and Videocon Industries limited as accused in the FIR registered under IPC sections related to criminal conspiracy and provisions of prevention of corruption act.

The CBI statement said it was alleged that a loan of Rs 300 crore was sanctioned to a Mumbai-based private company Videocon in contravention of the rules and policy by the sanctioning committee.

"It was further alleged that the then MD & CEO, ICICI Bank (Chanda Kochhar), being the head of the sanctioning committee, who in criminal conspiracy with other accused to cheat ICICI Bank, dishonestly and by abusing her official position sanctioned this loan in favour of said Mumbai based private company," said the CBI statement.

The FIR says VN Dhoot transferred Rs 64 crore to NuPower Renewable managed by Deepak Kochhar after the Rs 300-crore loan was disbursed to a Videocon group company.

From June 2009 to October 2011, another five loans amounting to Rs 1,575 crore were also reported to have been sanctioned to said group companies by various sanctioning committees of ICICI Bank in violation of credit policy of the bank. The existing outstanding in the accounts of these private group companies were adjusted in rupee term loan of Rs 1,730 crore sanctioned by ICICI Bank under refinance of domestic debt under consortium arrangement on April 26, 2012. The account of Mumbai-based private company (Videocon) and its group companies was declared non-performing asset n June 2017

The CBI has alleged that these people conspired to defraud ICICI Bank of Rs 1,730 crore. The matter pertains to an alleged quid-pro-quo transaction involving Deepak Kochhar and Dhoot.