Videocon gets loan of 3250 crore from ICICI, bank CEO’s husband gets sweet deal

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The Indian Express reported on December 2008 that, Venugopal Dhoot of the Videocon Group set up a company with Deepak Kochhar, husband of ICICI Bank MD and CEO Chanda Kochhar and two of her relatives; then gave a Rs 64-crore loan to this company through a fully owned entity before he transferred the latter’s ownership to a trust headed by Deepak Kochhar for just Rs 9 lakh.

The propriety and conflict of interest arises, the transfer of the company to Deepak Kochchar happened six months after the Videocon Group got a loan of Rs 3,250 crore from ICICI Bank. Almost 86 per cent of that loan (Rs 2,810 crore) remains unpaid and Videocon account was declared an NPA in 2017. The Dhoot-Kochhar-ICICI web of transactions is being examined by investigative agencies.

The Indian Express sent questionnaire to ICICI Bank to find out the case ICICI Bank issued a press release Wednesday evening saying “there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours.” It said the Board “reposes full faith” in Chanda Kochchar and added that “malicious and unfounded rumours” were being spread to “malign the Bank.”

The Indian Express as per records considered the sequence of events:-

– In December 2008, Deepak Kochhar and Venugopal Dhoot set up NuPower Renewables Pvt Ltd (NRPL), he held 50 per cent stake in the company with his family members and associates. Deepak Kochhar and Pacific Capital owned by Deepak Kochhar’s father and Chanda Kochhar’s brother’s wife held the remaining 50 per cent.

– In January 2009, Dhoot resigned as director of NuPower and transferred his 24,999 shares in the company to Kochhar for Rs 2.5 lakh.

– In March 2010, NuPower got a loan of Rs 64 crore (as fully convertible debenture) from a company called Supreme Energy Private Limited which was 99.9 per cent owned by Dhoot.

– Supreme Energy became a 94.99 per cent shareholder in NuPower by the end of March 2010. Kochhar held the remaining 4.99 per cent stake in NuPower at the time.

– In November 2010, Dhoot transferred his entire holding in Supreme Energy, to his associate Mahesh Chandra Punglia.

– September 29, 2012 to April 29, 2013, Punglia transferred his holding to Pinnacle Energy, a trust, where Deepak Kochhar was the managing trustee. The total transaction value of the complete transfer of shares from Punglia to Kochhar’s Pinnacle Energy trust: Rs 9 lakh.

In effect, Supreme Energy gave a loan of Rs 64 crore to NuPower and then got subsumed by Pinnacle Energy within three years. ICICI didnt responded to the questionnaire on these financial transactions, share transfers between Dhoot/Videocon companies and companies run by Deepak Kochhar, and on the issue of conflict of interest.

The issue of loan granted to Videocon Group, the bank said: “In 2012, a consortium of over 20 banks and FIs where State Bank of India was the facility agent (Lead) sanctioned facilities to the Videocon group (Videocon Industries Ltd. and 12 of its subsidiaries/ associates as co-obligors) for a debt consolidation programme and for the group’s oil and gas capital expenditure programme aggregating approximately Rs. 40,000 crore…ICICI Bank sanctioned its share of facilities aggregating approximately Rs 3250 crore which was less than 10% of the total consortium facility in April 2012. “The current outstanding against this loan is Rs 2810 crore and total current exposure to Videocon group is Rs 2849 crore…The Videocon group account has been classified as an NPA during 2017.

Promoter Venugopal Dhoot forms JV with Chanda Kochhar’s husband, loans Rs 64 crore, then hands him ownership of lending entity for Rs 9 lakh; ICICI Bank declares Videocon account NPA

In December 2008, Venugopal Dhootof the Videocon Group set up a company with Deepak Kochhar, husband of ICICI Bank MD and CEO Chanda Kochhar, and two of her relatives; then gave a Rs 64-crore loan to this company through a fully owned entity before he transferred the latter’s ownership to a trust headed by Deepak Kochhar for just Rs 9 lakh, an investigation by The Indian Express has found.

In what raises questions of propriety and conflict of interest, the transfer of the company to Deepak Kochchar happened six months after the Videocon Group got a loan of Rs 3,250 crore from ICICI Bank. Almost 86 per cent of that loan (Rs 2,810 crore) remains unpaid and Videocon account was declared an NPA in 2017.

ICICI Bank did not respond to queries sent by The Indian Express on these financial transactions, share transfers between Dhoot/Videocon companies and companies run by Deepak Kochhar, and on the issue of conflict of interest

It further said “The current outstanding against this loan is Rs 2810 crore and total current exposure to Videocon group is Rs 2849 crore…The Videocon group account has been classified as an NPA during 2017.” Venugopal Dhoot said, “On January 15, 2009, I resigned as a director of NuPower Renewables and Supreme Energy Private Ltd and sold at par the 24,996 shares of NuPower and 9,990 shares of Supreme Energy held by me, thereby relinquishing my right, title and interests in the said shares, giving up control and management of Supreme Energy and completely disassociating myself from both the Companies all on the same day, as I got too busy with my other larger business like oil & gas, telecommunication, etc.”

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