The scrutiny of the credit sanctions in the ICICI-Videocon loan case by the Reserve Bank of India (RBI) highlighted these sanctions at the Videocon group between June 2009 and April 2012, when Chanda Kochhar was managing director and CEO of the bank, were a “reckless decision” and a clear case of “conflict of interest on his part”, according to the indictment of the Directorate of Enforcement.
The 308-page indictment, filed by the Financial Investigation Agency in the PMLA Special Court here last month and attested to by IANS, said RBI official Malli Sudhakar in a review report dated August 3, 2018, and in his statement to the agency on October 16 this year, revealed that there was a “conflict of interest” on Kochhar’s part.
Sudhakar had cited “the lack of transparency in the exclusion of the charge of securities and the release of the existing security of the Videocon group taken as collateral by ICICI Bank and an imprudent decision to sanction the proposal to the Videocon group by ICICI Bank, of which Chanda Kochhar was chairman of the recommendation committee and member of the sanctions committee, when she was managing director and CEO of the bank.
The managing director claimed that the head of the RBI, in his statement, reiterated that it was a “reckless decision” by the ICICI bank to increase its exposure to the Videocon group by sanctioning a new term loan in rupees (RTL) of Rs 750 crore.
Sudhakar further cited the release of a guarantee or the non-creation of a charge by ICICI Bank on the group’s assets.
“The primary security coverage available with ICICI Bank with respect to Videocon Group has increased from 2.67 times to 1.67 times,” he said.
He also claimed that there was a “conflict of interest” on the part of ICICI Bank, as the attorneys and attorneys for the RTL deal between the bank and Videocon in connection with the debt consolidation were Amarchand and Mangaldas and Suresh A. Shroff and Company.
He claimed that the same firm was also appointed as a law firm by the bank’s board of directors to investigate the alleged counterpart agreement between Chanda and the Videocon group reflecting a conflict of interest.
The ED claimed that even Judge BN Srikrishna (retired), who was appointed head of the investigation by the bank to conduct an independent investigation into the allegations against the then CEO and the CEO in his report has noted that “violations were caused by Chanda Kochhhar because of her non-disclosure regarding non-arm’s length transactions made by her and her family with Credentials Finance Ltd (CFL), Videocon Group and others”.
He said evidence provided by the RBI official and the board of inquiry revealed that Kochhar “deliberately did not disclose the association of herself and her husband Deepak Kochhar with the Videocon group and her Chief Venugopal Dhoot “.
He further alleged that Chanda Kochhar did not “recuse” herself from the committees recommending or sanctioning the loan proposals of the Vidocon group and that the loan of Rs 300 crore had been sanctioned to Videocon International Electronics Ltd (VIEL) by a committee led by it.
The ED alleged that the loan of Rs 300 crore was sanctioned on the condition that Dhoot take care of her husband’s interests.
“Out of Rs 300 crore, Rs 64 crore was embezzled by VIL for unauthorized purposes and for the benefit of Deepak Kochhar as the amount was transferred to his company Nupower Renewables Private Ltd (NRPL),” the managing director said .
The ED filed its first indictment in the ICICI-Videocon loan case in the first week of November this year, naming the Kochhars, Dhoot and VIEL, Videocon Industries Ltd, NPRL and Supreme Energy Pvt Ltd , among others.
Deepak Kochhar is currently in judicial custody following his arrest by the ED.
The case concerns alleged irregularities in the sanctioning of six loans worth Rs 1,875 crore to Videocon Industries Ltd, Videocon International Electronics Ltd and four other companies associated with the Videocon group between June 2009 and October 2011.
Chanda Kochhar was part of the sanction committee which decided on two loans – Rs 300 crore to Videocon International Electronics on August 26, 2009 and Rs 750 crore to Videocon Industries Limited on October 31, 2011.
The loans were issued in alleged violation of the bank’s policies and regulations, sources said.
The sanctioned Rs 300 crore term loan to VIEL was disbursed on September 7, 2009. The next day, Dhoot transferred Rs 64 crore to NuPower Renewables Ltd through Supreme Energy Private Ltd founded by him.
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Posted on: Wednesday December 09, 2020 10:06 PM IST