Chanda Kochhar, chief executive officer of ICICI Bank Ltd., speaks during the World Economic Forum’s India Economic Summit (Photographer: Prashanth Vishwanathan/Bloomberg)

CBI Registers FIR Against ICICI Bank’s Former MD & CEO Chanda Kochhar In Case Related To Husband

The Central Bureau of Investigation filed a first information report against ICICI Bank Ltd.’s former chief executive officer Chanda Kochhar, her husband Deepak Kochhar, also managing director of Nupower Renewables Ltd., and Venugopal Dhoot, managing director of Videocon Group; over alleged irregularities in transactions between the lender and the private entities.

Other entities named in the FIR include the private firms Supreme Energy Pvt. Ltd., Videocon International Electronics Ltd. and Videocon Industries Ltd. The FIR also names “unknown public servants”.

Also read: FIR Against Chanda Kochhar: What The CBI Alleges

In April 2018, the CBI had registered a preliminary enquiry against Deepak Kochhar and Venugopal Dhoot, chairman of Videocon group. Chanda Kochhar had not been named in the preliminary enquiry.

The preliminary enquiry was related to transactions between the Videocon Group and Deepak Kochhar—husband of Chanda Kochhar. In the FIR, which has followed the enquiry, the CBI alleges that atleast six “high value” loans were sanctioned to various Videocon Group companies between June 2009 and October 2011 in “contravention of the rules and policy by the sanctioning committee”. This included a Rs 300 crore loan to Videocon International Electronics Ltd (VIEL).

Chanda Kochhar was one of the members of the sanctioning committee, who in criminal conspiracy to cheat ICICI Bank and in pursuance of criminal conspiracy on 26.08.2009, dishonestly by abusing her official position sanctioned this loan in favor of M/s. VIEL.
CBI Statement

The FIR goes on to allege that on 07.09.2009, this loan was disbursed to VIEL. The very next day, on 08.09.2009, Venugopal Dhoot transferred an amount of Rs 64 crore to Nupower Renewables Ltd. from Videocon Industries through Supreme Energy. This was the first major capital received by Nupower to acquire its first power plant, said the CBI.

Thus, Chanda Kochhar got illegal gratification / undue benefit through her husband from Videocon Industries, Venugopal Dhoot for sanctioning loans of Rs 300 crore to VIEL.
CBI FIR

Shantonu Sen, former joint director of the CBI said that it is the quid pro quo which becomes an offence. “CBI will have to prove that Chanda Kochhar was in knowledge of the quid pro quo for it to be termed as a criminal offence. The money trail and the fact that it was paid is the evidence that the CBI holds,” Sen told BloombergQuint.

The investigating agency said it carried out raids across some of the offices of Videocon Industries today. Raids were conducted at the Nariman Point headquarters of Videocon Industries and at an office of the group in Aurangabad, according to the investigating agency. The agency is also conducting raids at offices of NuPower Renewables and Supreme Energy in Mumbai.

ICICI Bank did not immediately respond to a request for a comment.

Role Of The Credit Committee

In addition to those named as accused in the FIR, the CBI had said that it may investigate the role of senior officials including K.V. Kamath in the sanctioning of Rs 1575 crore in loans to companies related to the Videocon Group. These loans were sanctioned by various committees on various dates, said the FIR.

Members on these committees, whose role the CBI said may be investigated, include:

  • K.V. Kamath, former CEO of ICICI Bank
  • Sandeep Bakshi, current CEO of ICICI Bank
  • N.S. Kannan, current CEO of ICICI Prudential Life Insurance
  • Rajiv Sabharwal, current CEO of Tata Capital
  • Zarin Daruwala, current CEO of Standard Chartered Bank in India
  • Sonjoy Bhattacharya, chairman of Goldman Sachs (India) Securities
  • K. Ramkumar, former executive director of ICICI Bank
  • Homi Khusrokhan
These loans have turned NPA resulting in wrongful loss to ICICI bank and wrongful gain to the borrowers and accused persons. The role of these senior officers of the sanctioning committee may also be investigated.
CBI FIR

Between 2009-10 and 2014-15, the Credit Committee was headed by Kamath. From 2009-10 till 2011-12, Kamath chaired this in the role of non-executive director. Starting May 1, 2012, Kamath was re-classified as an independent director and continued to chair the Credit Committee. Between 2009 and 2012, Kamath was also chairman of the board. In 2015-16 and 2016-17, the Credit Committee was headed by Kochhar herself.

The FIR does not go into further details of whether the credit committee sanctioned these loans as part of a broader consortium, which the bank has argued since the allegations came to the fore.

“An FIR does not delve into details. An investigation will start now. Members of the committee will be questioned. They may either be found to be innocent or guilty. It can go either way,” said senior lawyer H.P. Ranina.

Implications For ICICI Bank

The allegations of a quid pro quo between Kochhar’s family and the Videocon Group had first come to light in 2016 and re-emerged in 2018 when Indian Express, in an article published on March 29, detailed a series of transactions between the Videocon Group and NuPower Renewables between 2008-2013.

The bank argued that its credit processes are robust and that these loans were granted as a part of a broader banking consortium loan, worth almost Rs 40,000 crore, approved in 2012.

While at first the lender backed Kochhar, she later stepped aside and an independent enquiry headed by Justice BN Srikrishna was initiated. That enquiry is still to be completed. On October 4, 2018, Chanda Kochhar stepped down and Sandeep Bakshi was named as CEO.

Chanda Kochhar is not actively involved in the bank anymore. That helps reduce the damage to the bank. However, risks to the bank remain in the course of the investigation.
Saswata Guha, Director, Fitch Ratings