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

The CBI had booked Chanda Kochhar, her husband, Venugopal Dhoot of Videocon Group, and others as accused in an FIR registered under IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act

The Central Bureau of Investigation (CBI) on 23 December arrested former ICICI Bank Managing Director and Chief Executive Officer (MD&CEO) Chanda Kochhar and her husband Deepak Kochhar in connection with the Rs 3,250 crore Videocon loan scam.

The central probe agency alleged cheating and irregularities in loans sanctioned by the bank to the Videocon group between 2009 and 2011 when Kochhar was heading the bank. This arrest is significant in the case after a prolonged probe over years. Earlier, the bank had terminated Kochhar as CEO denying the former executive retirement benefits.

The CBI had booked Chanda Kochhar, her husband and Venugopal Dhoot of Videocon Group, along with 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 the Prevention of Corruption Act.

Read More: MC Explains | Why Bombay High Court validated Chanda Kochhar’s termination by ICICI Bank

In a quid-pro-quo deal, the CBI alleged, Videocon promoter Venugopal Dhoot allegedly invested crores of rupees in Nupower 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. This amounted to criminal conspiracy and cheating, the probe agency said.

Kochhar's termination

In May 2018, ICICI Bank initiated an inquiry against Kochhar. The former CEO went on leave thereafter and later applied for 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 Kochchar's termination of appointment as is mandatory under the provisions of the RBI Act.

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

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.

Read More: Chanda Kochhar: A look at the career and controversial exit of ICICI Bank CEO and MD

In her application, Kochhar sought specific performance of the entitlements and benefits that were unconditionally provided to her when the bank accepted her early retirement in 2018.

The bank could not have terminated a person who had already retired, the application said. The benefits granted to her, unconditionally, included employee stock options that were exercisable till 2028.

But the court wasn’t convinced by Kochhar’s arguments. Besides, Kochhar contended that the Justice Srikrishna inquiry was a preliminary probe and could not result in disciplinary action.

The court said didn't find merit in that argument. “I further find no fault in the inquiry headed by Justice Srikrishna (retired), which is with the view to ensure a fair and independent process, particularly with regard to the allegations of misconduct made against the MD and CEO of the ICICI Bank,” the court said.

Read More: Chanda Kochhar: The fall of a much-haloed leader

ICICI Bank accepted the early retirement of Kochhar as it didn’t have complete knowledge of the facts, including non-disclosure by Kochhar on various issues, the Court observed.

What did the CBI probe find?

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 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.

Investigators found that between June, 2009 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, the probe revealed that this was part of a quid-pro-quo deal between Kochhars and Videocon's Dhoot.

(With inputs from PTI)