On the day The Indian Express reported about ICICI Bank’s Rs 3,250-crore loan to Videocon Group whose owner Venugopal Dhoot later offered a sweetheart deal to the husband of bank MD and CEO Chanda Kochhar, bank chairman M K Sharma said Kochhar was part of the credit committee which sanctioned the loan but did not recuse herself from the committee. “The board doesn’t believe it represents a conflict as Videocon Group is not an investor in NuPower Renewables. Hence, there was no need for Chanda Kochhar to recuse herself from the committee,” Sharma said at a conference addressing TV channels Thursday.
Indicating that regulators (the RBI) had intervened in the issue, Sharma said the bank had satisfactorily replied to all questions of the regulators. He said it’s an ongoing process. “However, it’s privileged communication, so the company cannot share specific details about queries by the regulator,” he said.
An investigation by The Indian Express showed that in December 2008, Venugopal Dhoot of the Videocon Group set up a company called NuPower Renewables Pvt Ltd (NRPL) with Deepak Kochhar, husband of 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 transfer of the company to Deepak Kochhar happened six months after the Videocon Group got a loan of Rs 3,250 crore from ICICI Bank, raising questions of propriety and conflict of interest. Almost 86 per cent of that loan (Rs 2,810 crore) has remained unpaid and Videocon account was declared an NPA in 2017. Sources have confirmed to The Indian Express that the Dhoot-Kochhar-ICICI web of transactions is being examined by investigative agencies.
According to Sharma, the committee which approved the loan was chaired by the then bank chairman and included many independent and working directors of the bank. Stating that Kochhar was not the chairperson of this committee, he said “no single individual, in whatever position, can influence the lending of credit to specific borrowers”.
Sharma reiterated the ICICI Bank’s statement issued Wednesday wherein the board had backed Kochhar. He said a consortium of over 20 banks — State Bank of India was the lead bank — had sanctioned facilities to the Videocon Group aggregating to approximately Rs 40,000 crore.
According to a recent review by the bank’s board, ICICI Bank’s exposure to Videocon at the time was at Rs 3,250 crore, less than 10 per cent of the total amount lent by the consortium. ICICI Bank followed the same terms and conditions that were followed by all other banks. The initial due diligence for the financing programme was prepared by the lead arrangers — SBI Caps and IDBI Bank.
Sharma said the question of any special benefit to Videocon Group by ICICI Bank did not arise.
He said Chanda Kochhar had been making all regulatory disclosures required of her according to the Companies Act and the Banking Act.
“The loan was disbursed to an escrow pool account and not directly to Videocon Group. The board concluded there was no question or scope for any favouritism, nepotism or quid pro quo on the part of Kochhar. No individual employee has the ability to influence credit given by the bank,” he said.