With investigative agencies now probing the ICICI Bank-Videocon loan issue, Life Insurance Corporation of India (LIC), India’s largest institutional investor and the single largest shareholder in ICICI Bank has decided to keep an “active watch” and to take “appropriate action if required” in the matter.
LIC holds close to ten per cent stake in the bank which is worth around Rs 15,000 crore at the current market price. “We are keeping an active watch in this matter, in view of recent developments and will take appropriate action if required,” LIC said in an statement, responding to queries from The Indian Express.
However, to a question on whether LIC has flagged off its concern on the alleged conflict of interest, favouritism and nepotism by ICICI Bank while granting loans to Videocon, LIC said: “As per our policy, we do not interfere in day-to-day affairs of any company where we are a financial investor. The primary objective of LIC is to protect policy holder’s funds and ensure growth of its investments.”
A report by The Indian Express showed that in December 2008, Venugopal Dhoot of the Videocon Group set up a firm 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 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.
Significantly, LIC Chairman VK Sharma is on the board of ICICI Bank. “LIC is represented by a non-executive director on the board of ICICI Bank, who actively participates in the board meetings. However, we feel it is inappropriate to comment in media about the discussions and decisions taken at the board level,” LIC said.
When asked whether LIC is planning to ask ICICI board to conduct an audit by an external agency, LIC said: “The matter regarding audit, special audit or forensic audit of the bank is the domain of audit committee, board/regulator of the bank.”