Kochhars and Venugopal Dhoot are accused of quid pro quo in an alleged money laundering case involving Videocon Group and ICICI Bank
Once regarded as a doyen of the Indian banking industry, Chanda Kochhar, joined ICICI Bank, then known as ICICI Ltd, as a management trainee in 1984. Rising to the pole position of what was a traditionally male-dominated industry, Padma Bhushan Kocharr resigned from her position of Managing Director & CEO of ICICI Bank in October 2018, after she and her husband faced allegations of quid pro quo and conflict of interest with respect to a loan extended to Videocon Group.
After one-and-half years of Central Bureau of Investigation (CBI) registering an FIR against her husband, Deepak Kochhar, was arrested by the Enforcement Directorate (ED) on September 7, in the alleged ICICI Bank-Videocon money laundering case and will remain in the law enforcement agency’s custody until September 19.
The ED opened an investigation against the businessman under the provisions of the Prevention of Money Laundering Act (PMLA) based on the FIR filed by CBI on January 22, 2019, under sections 120 B, 420 of the Indian Penal Code.
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Fall from grace: ICICI Bank-Videocon alleged money laundering case
As per preliminary investigations of stock market regulator Securities & Exchange Board (SEBI) which preceded the CBI FIR and the ensuing ED investigation, Chanda Kochhar and her husband had may business dealings with Videocon Group promoter Venugopal Dhoot over several years. Deepak and Dhoot were co-founders of NuPower Renewables besides other firms. The former ICICI Bank MD & CEO was accused of being connected in granting a loan of Rs 3,250 crore to Dhoot’s Videocon out of which Rs 2,810 crore were not paid back and were declared to be non-performing assets (NPAs) by ICICI Bank.
ICICI Bank was part of a consortium of banks headed by public lender State Bank of India (SBI) which lent Rs 40,000 crore to Videocon to consolidated the group’s debt and expand into oil & gas business.
What ED investigation found
ED found that Videocon and its group companies were sanctioned fresh loans of Rs 1,730 crore which eventually turned out to be NPAs for ICICI Bank in June 2017. Deepak Kochhar was not cooperating in the investigation and therefore was placed under arrest by the ED. The law enforcement agency is also probing two other loans sanctioned by ICICI Bank during Chanda Kochhar’s tenure to Gujarat-based pharmaceutical firm Sterling Biotech and to Bhushan Steel Group – both are being investigated for alleged money laundering charges.
Is Chanda Kochhar complicit?
Chanda Kochhar, in her capacity as the CEO was the member of credit committee of ICICI Bank which signed off on the Rs 3,250 crore loan granted to Videocon.
Investigators allege that it’s case of nepotism, conflict of interest and quid pro quo as Deepak Kochhar’s NuPower Renewables benefitted significantly from Videocon’s investment in exchange of the Rs 3,250 crore-loan granted to the latter by ICICI Bank. It was the alleged non-disclosure of this piece of information which saw the ten-year-long CEO of the country’s third-largest bank fall from grace.
