While ICICI Bank CEO and MD Chanda Kochhar’s husband Deepak Kochhar’s transactions with Videocon promoter Venugopal Dhoot are under the scanner of investigative agencies, another potential conflict-of-interest link has emerged, this time with a Singapore-based financial services company founded by Deepak Kochhar’s brother.
Avista Advisory, founded by Rajiv Kochhar, who is the brother-in-law of Chanda Kochhar, got the mandate to restructure foreign currency-denominated debt deals worth over $1.7 billion of seven companies over the last six years. All these companies were borrowers of ICICI Bank at the same time.
In at least one of these deals, ICICI Bank was the lead bank of the lenders.
According to disclosures made by Avista Advisory, the company acted as an advisor in restructuring debt of Jaiprakash Associates, Jaiprakash Power Ventures, GTL Infrastructure, Suzlon, JSL and Videocon Group.
In 2017, Avista acted as “Debtor Advisor” in the restructuring of foreign currency convertible bonds (FCCB) of Jaiprakash Associates amounting to $110 million. While Avista advised on the FCCBs, ICICI Bank was the lead bank in the consortium of banks that lent to Jaiprakash Associates.
Avista also acted as “Debtor Advisor” in the restructuring of $200-million FCCB of Jaiprakash Power Ventures Ltd. In this case, too, ICICI Bank was a lender to the company and also received equity under the corporate debt restructuring package.
FCCB is a convertible bond issued in a foreign currency. Market experts say that in many cases of stressed assets in India, these were issued to prevent a default in the domestic market.
In 2014, Avista was the “Creditor Advisor” for the restructuring of $577-million worth of FCCB of Suzlon. In the case of Suzlon, ICICI Bank was one of its lenders.
In November 2012, Avista acted as “Debtor Advisor” for FCCBs worth $306 million for GTL Infrastructure. ICICI Bank was a lender to GTL Infra and took 29.3 per cent stake in the company in July 2011 as part of the loan restructure.
Another case where Avista acted as “Debtor Advisor” was to Jindal Stainless in 2016 which was also a borrower of ICICI Bank.
Avista mentions two loan restructuring deals involving the Videocon Group on its website. Avista acted as “Creditor Advisor” for two FCCB deals of Videocon Industries worth $194 million and $97 million in 2015 and 2016 respectively.
Responding to a questionnaire from The Indian Express, an ICICI Bank’s spokesperson said: “We would like to categorically state that ICICI Bank has never engaged Avista Advisory Group for any services at all. Your mail itself indicates that the said entity claims to be an advisor to various corporates. You may refer any query regarding Avista Advisory Group to the firm and its clients.”
The spokesperson added: “Kindly also note that the brother of a husband does not fall within the definition of a “relative” under the Companies Act, 1956 or 2013 or the Rules thereunder. Hence there is no requirement of any disclosure of such a relationship by any official of the Bank…In view of all the above, your insinuation of conflict of interest is totally baseless and malafide in intent.”
Responding to questions mailed to Rajiv Kochhar by The Indian Express, Avista Advisory said: “There is no conflict. The entire process of selection of “Debtor Advisor” was competitive. We were chosen as a “Debtor Advisor” in the restructuring of the FCCBs of Jaiprakash Associates Limited, Jaiprakash Power Ventures Limited and GTL Infrastructure Limited. In these restructuring transactions, the “Debtor” of the FCCBs were the respective Companies and the “Creditor” were the respective Foreign Currency Convertible Bondholders who are “Foreign Investors” in these FCCBs. Avista advised the Companies in the negotiation with these Foreign Investors in order to restructure the FCCBs. Since the FCCB restructuring transaction did not involve any negotiations between the Companies and the “Domestic Lenders/ICICI Bank”, there is no conflict of interest of whatsoever nature.”
It further said, “There were no dealings with ICICI Bank at all in any of the above transactions…We would like to clarify that in the restructuring cases handled by Avista Advisory, the firm has not interacted with ICICI Bank in any manner or form. Further during the course of the restructuring transactions Avista has not raised or mobilized any funds for its clients from ICICI Bank. Avista was involved in discussion and negotiation only between the Indian Company and the Foreign Creditors.”
On the Videocon case, Avista said: “In the two Videocon deals referred in your email, Avista was appointed by the Foreign Creditors (i.e. the Foreign Investors in the FCCBs issued by Videocon) to restructure and recover the investment made by them in the FCCBs. Accordingly, Avista acted as the “Creditor Advisor” and was not the advisor to the Videocon Group. We would also like to clarify that we represented the Foreign Investors and did not represent any Domestic Lenders/ICICI Bank. These Foreign Creditors who had invested in the FCCBs include some of the leading Global Institutional Investors who had appointed Avista in order to assist them to restructure and recover the amounts invested by them in the FCCBs.