FIR Against Chanda Kochhar: What The CBI Alleges

The Central Bureau of Investigation on Jan. 22 filed a first information report against ICICI Bank Ltd.'s former managing director and chief executive officer, Chanda Kochhar, her husband, Deepak Kochhar and VN Dhoot, managing director of Videocon Industries Ltd. over alleged irregularities in transactions between the lender and private entities.

The FIR details the loan transactions between ICICI Bank and companies related to the Videocon Group. It starts with providing the timeline over which companies involved in the transactions were set-up. The CBI then goes on to explain loan transactions, including one which establishes the alleged quid pro quo between Chanda Kochhar, Deepak Kochhar and Venugopal Dhoot and their companies.

The Entities Involved

• On July 3 2008, Supreme Energy Pvt Ltd. is incorporated and VN Dhoot (9990 shares) and his associate Vasant Kakade (10 shares) are the first directors.

• On Jan. 15 2009, VN Dhoot and Saurabh Dhoot (relative of VN Dhoot) resign as directors of Supreme Energy. Subsequently, control of this company is transferred to Deepak Kochhar by selling/transferring shares to Pinnacle Energy Trust, managed by Deepak Kochhar.
• Between this period, on Dec. 24, 2008, Nupower Renewables is incorporated and Deepak Kochhar, VN Dhoot and Saurabh Dhoot are the first directors of the company.
• On Jan. 15, 2009, VN Dhoot and Saurabh Dhoot resigned from Nupower. Before resigning, VN Dhoot allotted 19,97,500 warrants to Deepak Kochhar at the rate of Rs 10 per warrant, on an initial payment of Re 1 per warrant.
• On June 5, 2009, 24,996 shares of Nupower Renewables held by VN Dhoot and Deepak Kochhar group (Pacific Capital Services Pvt Ltd) are transferred to Supreme Energy Pvt Ltd., which becomes a 95 percent shareholder of Nupower Renewables.

The Loan Transactions

The loan transactions detailed took place from June 2009 till October 2011. Chanda Kochhar took over as chief executive officer of ICICI Bank on May 1, 2009. According to the FIR, six “high value” loans to various Videocon Group companies were given during this period.

• On June 30 2009, a rupee term loan of Rs 175 crore is sanctioned to Millennium Appliances India Ltd -- a Videocon Group company.
• On Aug. 26 2009, a loan of Rs 300 crore is sanctioned to Videocon International Electronics Ltd. The CBI said this was in contravention of the rules and policy by the sanctioning committee but did not specify which rules were violated.
• On Nov.17, 2010, Rs 240 crore is sanctioned to Sky Appliances Ltd.
• On Nov.17, 2010, Rs 110 crore is sanctioned to Techno Electronics Ltd.
• On May 30, 2011, Rs 300 crore loan is sanctioned to Applicomp India Ltd.
• On Oct.31, 2011, Rs 750 crore loan is sanctioned to Videocon Industries.

According to the FIR, the loans sanctioned to Sky Appliances, Techno Electronics and Applicomp India were for the purpose of enabling them to repay the unsecured loan availed by these companies from Videocon Industries. Further, a loan was also sanctioned to Videocon Industries for refinancing the existing loans of the company.

The CBI went on to say that the role of senior officials, who were on the bank’s credit committees at the time, may also be investigated. These officials include: Sandeep Bakhshi, K. Ramkumar, Sonjoy Chatterjee, N.S. Kannan, Zarin Daruwala, Rajiv Sabharwal, KV Kamath and Homi Khusrokhan.

Further, the CBI alleges that ICICI Bank had also released the security available in the form of FDR (fixed deposit receipts) of Rs 50 crore in the accounts of Sky Appliances, Techno Electronics without any justification.

The Alleged Quid Pro Quo

The alleged quid pro quo, detailed by the CBI, is in the case of the Rs 300 crore loan given on Aug.26, 2009 to Videocon International Electronics Ltd (VIEL). Chanda Kochhar was one of the members of the sanctioning committee.

• On Sept.7 2009, this loan was disbursed to VIEL.
• On the next day, Sept.8, 2009, VN Dhoot transferred Rs 64 crore to Nupower Renewables, managed by Deepak Kochhar.
• The loan was transferred to Nupower Renewables from Videocon Industries, through Supreme Energy.
• This, according to the CBI, was the first major capital received by Nupower Renewables to acquire its first power plant.