THE INCOME Tax department is probing the acquisition of the current family residence of Chanda Kochhar, the CEO and MD of ICICI Bank, in South Mumbai by her husband Deepak Kochhar in a complex transaction involving firms linked to Videocon Group, sources have told The Indian Express.
The link between Videocon and the residence of the Kochhars reinforces questions of propriety and conflict of interest that have dogged Chanda Kochhar and are now the subject of an “independent” probe announced by the ICICI Bank. On Monday, the bank said she will be on leave until the probe is completed.
The tax department, sources said, is now probing the transaction involving the acquisition of the flat at 45, CCI Chambers CHS Limited — it is in the Churchgate area opposite the Cricket Club of India — and has informed the Central Board of Direct Taxes (CBDT) about its findings so far.
On March 29, The Indian Express first reported that Videocon promoter Venugopal Dhoot provided crores of rupees 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 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.
Tax authorities have found that the Kochhar family’s residence since 1998 was bought through Credential Finance Ltd, a financial services firm set up by Deepak Kochhar and his brother Rajiv Kochhar in the mid-1990s, sources said.
Due to financial stress, the company filed for liquidation and was suspended from trading in 1996-97. Seven members of the Kochhar family and Videocon International had a stake of 2 per cent and 17.74 per cent, respectively, in Credential Finance as on 2001.
In 2009, Videocon Industries Ltd (VIL) nominated Quality Appliances Pvt Ltd, a firm with links to the Videocon Group, to take over the flat from Credential Finance in lieu of the final settlement of the amount due to VIL from Credential Finance, sources said.
According to the agreement, Credential Finance transferred the property to settle the money it had taken from VIL. “After 2010, the same flat was re-acquired by Deepak Kochhar at a price, which was lower than the market price,” sources said.
The tax department, sources said, has recorded the statements of all shareholders and directors of Quality Appliances and Credential Finance in connection with the case.
Reached for comment by The Indian Express, Deepak Kochhar said he is the owner of the flat at CCI Chambers since 1996. “The property belongs to me since the beginning, and the conveyance deed and share certificate of the property are in my name. I have given all the clarifications to the department,” he said.
In an email response to queries from The Indian Express, Venugopal Dhoot said: “The flat at 45, CCI is purchased and owned by Mr Deepak Kochhar since the very beginning over 20 years back. The said flat was never mortgaged to Videocon Industries Ltd. We have no concern with the said flat.”
According to documents with the Registrar of Companies (RoC), Quality Appliances Pvt Ltd, which owned the flat at CCI Chambers after it was transferred from Credential Finance in 2009, is now known as Quality Techno Advisors Pvt Ltd. The registered office of the firm is 618, Nariman Point in Mumbai, which is also the office of NuPower Renewables Pvt Ltd, the company promoted by Deepak Kochhar. Quality Techno Advisors is now an advisory firm owned by Deepak Kochhar.
RoC documents show that Quality Appliances was set up in 2008 with Vilas Salunke and Kavishwar Patil holding 5,000 equity shares each. The firm’s registered address was in Andheri in suburban Mumbai, which was also the head office of Videocon Telecommunications Ltd.
Both Salunke and Patil have been directors of various Videocon Group firms such as Videocon Industrial Finance Ltd, Videocon VCR Securities Ltd, Videocon Mining Ltd, Videocon Securities Ltd, Pacific Appliance Manufacturing and Trading Ltd, Dhoot Entertainment and Gaming Solutions Ltd and V N Communication Systems Ltd.
According to the RoC documents, in 2009-10, Quality Appliances acquired an office premises for Rs 3.54 crore, and changed its registered office address in the official records from Andheri to 45, CCI Chambers in South Mumbai.
In March 2010, three companies promoted by Videocon Industries — TekCare India Pvt Ltd, Evans Fraser & Co Ltd and Nippon Investment and Finance Company Pvt Ltd — together were allotted equity shares of 1 lakh at a premium for Rs 3.5 crore and became the majority shareholder of the company holding 90.91 per cent stake. The remaining stake was held by Salunke and Patil.
The company, according to its 2011 annual report, said that it “gave performance guarantee in favour of Supreme Energy Pvt. Ltd on behalf of NuPower Renewables Ltd worth Rs 7 crore” that was valid up to March 31, 2013. Quality Appliances also said that the purchase of the office premises in 2009-10 is shown as an investment in its accounts.
In 2012, the TekCare India, Evans Fraser & Co and Nippon Investment and Finance Company sold their 90.91 per cent stake to Patil and exited Quality Appliances. This took the total shareholding of Patil to 95.45 per cent.
In 2013, Quality Appliances changed its name to Quality Techno Advisors Pvt Ltd and Patil continued to hold 95.45 per cent stake in the firm until March 2016, according to RoC documents.
According to the latest available financial documents of March 2017, the firm is owned completely by Deepak Kochhar through Quality Advisors (Trust). The company has also made a provision of Rs 3.5 crore (50 per cent liability) towards the Rs 7 crore guarantee that it gave in favour of Supreme Energy Pvt Ltd on behalf of NuPower Renewables Ltd in 2010-11.