A preliminary examination by regulator Sebi has favoured adjudication proceedings against ICICI Bank and its CEO Chanda Kochhar for alleged violation of disclosure norms regarding “conflict of interest” in the business dealings of her husband with the Videocon group, a PTI report said.
ICICI Bank may face a penalty of up to Rs 25 crore under Sebi regulations for such lapses, while the fine for Kochhar may go up to Rs 1 crore, besides other penal actions, the news agency quoted a senior official as saying. The adjudication process will formally convene soon, after taking into account the replies to the showcause notices issued by Sebi to ICICI Bank, Kochhar and others in this matter, the report said.
According to an ICICI Bank spokesperson, the bank and its MD received a showcause notice seeking a response as to why an inquiry should not be held against them under the Securities Contracts (Regulation) Rules. “Documents relied upon under the notice have been received today. Appropriate response to the showcause notice after seeking legal advice would be submitted within the timeline provided,” the spokesperson told PTI.
On March 29, The Indian Express first reported that Videocon promoter Venugopal Dhoot provided a loan of Rs 64 crore to NuPower Renewables Pvt Ltd (NRPL), a firm he had set up with Chanda Kochhar’s husband and two relatives six months after the business group got Rs 3,250 crore as loan from ICICI Bank in 2012.
Dhoot transferred proprietorship of the company to a SEBI trust owned by Deepak Kochhar for Rs 9 lakh, six months after he received the loan from ICICI Bank. The Videocon account was declared an NPA or a bad loan in 2017.
Questions of propriety and conflict of interest involving Chanda Kochhar and Videocon are now the subject of an “independent” probe announced by the ICICI Bank.
Last Monday, the bank said she will be on leave until the probe is completed. On Thursday, The Indian Express reported that the income tax department is probing the acquisition of the current family residence of Chanda Kochhar in South Mumbai by her husband Deepak Kochhar in a complex transaction involving firms linked to Videocon Group.
PTI ADDS: According to sources, Sebi’s preliminary examination findings are based on enquiries made by the regulator in the matter involving Kochhar, ICICI Bank and Videocon Group. As per the report, Kochhar has admitted that her husband Deepak Kochhar has had many dealings with Videocon Group over the last several years.
Besides, it has also been admitted by her that Deepak Kochhar and Venugopal Dhoot were co-founders and promoters of NuPower.
Further, in June 2009, shares of Dhoot and Pacific Capital (owned by Deepak Kochhar’s father and sister-in-law) in NuPower were sold to Supreme Energy. Also, Dhoot continues to hold interest in NuPower through debentures of Rs 64 crore, subscribed through Supreme Energy, the regulator found.
The association of Deepak Kochhar and Videocon has also been confirmed in case of Credential Finance.
On the basis of the preliminary report, Sebi has concluded that there was conflict of interest in the transactions of ICICI Bank with Videocon.
By not disclosing the details of her husband’s dealings with Videocon, Kochhar has not complied with the provisions of listing agreement, and the bank failed in ensuring that its directors complied with listing rules, the senior official said. Therefore, adjudication proceedings have been recommended against ICICI Bank and Kochhar, he added.
(With inputs from PTI)