A report by The Indian Express had shed light on impropriety, conflict of interest and a possible quid pro quo deal between ICICI Bank MD and CEO Chanda Kochhar’s husband Deepak Kochhar, Videocon group chairman Venugopal Dhoot and the ICICI Bank.
What Has Happened?
Let us understand the sequence of transactions that has led to suspicion of impropriety and the claim that the Videocon Group must have been extended loans due to a personal business relationship between Chanda Kochhar’s husband and Videocon group chairman Venugopal Dhoot.
In effect, Supreme Energy gave a loan of Rs 64 crore to NuPower and then got subsumed by Pinnacle Energy within three years, as alleged by the report of the Indian Express.
So, it is succinctly clear from the above transactions that Deepak Kochhar benefitted financially through a series of transactions. Consequently, it has been observed that the Videocon Group got a loan of Rs. 3,250 crore from ICICI Bank just before the transfer of company to Deepak Kochhar took place.
Almost 86 percent of that loan (Rs. 2,810 crore) remains unpaid and Videocon account was declared an NPA in 2017.
What Is ICICI’s Stand?
As reported by Economic Times, ICICI has clearly mentioned that,
“On looking at all the above facts, the board has come to the conclusion that there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours.”
“The loans were among those given by a consortium of about 20 lenders”, the bank said.
ICICI Bank’s share was about 10% and the rest was provided by others under the same terms and conditions.
The bank had a robust credit appraisal system, which ensures that no individual can unilaterally decide on funding a company, the board said.
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How Did The Matter Come Up In Media?
On March 15, 2016, in a letter addressed to Narendra Modi, Arvind Gupta, an ICICI Bank shareholder alleged that the bank extended loans to the debt-laden Videocon Group despite its dubious track record of not returning debts primarily due to proximity in the business relationship between Venugopal Dhoot and Deepak Kochhar.
The bank explicitly denied such allegations.
“The board desires to clarify that none of the investors of NuPower Renewables are borrowers of ICICI Bank.”
In Defence Of Chanda Kochhar
In unequivocal terms, the bank has voiced its support behind it’s MD, Chanda Kochhar.
It is to be noted that at the time of sanctioning the 3,250 crores, KV Kamath was chairman of the board and Chanda Kochhar was not heading the credit committee.
“The board also commends the entire management team under the leadership of the MD & CEO for their hard work and dedication. We would urge you not to be misled by these rumours which are being spread to malign the bank and its top management.”
Sources: The Indian Express, Economic Times, Financial Express
Images- Google Images
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