The Central Bureau of Investigation has arrested Videocon Group’s Venugopal Dhoot in connection with the ICICI Bank loan fraud case. Previously, Chanda and Deepak Kochhar were arrested in the same case.
The 71-year-old Dhoot was apprehended in Mumbai, nearly three days after former ICICI Bank CEO and MD Chanda Kochhar and her husband Deepak Kochhar were apprehended by the CBI.
The Kochhars and Dhoot, as well as the companies Nupower Renewables (NRL), Supreme Energy, Videocon International Electronics Ltd, and Videocon Industries Limited, were named as accused in the FIR filed in 2019 under IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act.
What Does the Complaint Say Against Dhoot?
The CBI claimed that ICICI Bank granted credit facilities totaling 3,250 crore to Videocon Group companies promoted by Dhoot in violation of the Banking Regulation Act, RBI guidelines, and the bank’s credit policy.
According to the FIR, Dhoot made a 64 crore investment in Nupower Renewables through Supreme Energy Pvt Ltd (SEPL) and transferred SEPL to Pinnacle Energy Trust managed by Deepak Kochhar through a circuitous route between 2010 and 2012.
The ownership of Nupower and Supreme Energy was allegedly transferred through a complex web of shared transactions between Deepak Kochhar and Venugopal Dhoot.
How is Chanda Kochchar Involved?
Following allegations of corruption, Chanda Kochhar was fired as the CEO of ICICI Bank in 2019. Previously, the enforcement authorities claimed that Kochhar approved ‘high value’ loans to Videocon Industries, in violation of the bank’s lending policies. In exchange, Videocon’s owner made an investment in Deepak Kochhar’s NuPower Renewables.
During its preliminary investigation, the CBI discovered that six loans totaling 1,875 crore were sanctioned to the Videocon Group and companies associated with it between June 2009 and October 2011 in alleged violation of ICICI Bank policies. According to the agency, the loans were declared non-performing assets (NPAs) in 2012, resulting in a loss of Rs. 1,730 crore for the lender.
Such allegations prompted investigations by a number of agencies, including the CBI, the Enforcement Directorate (ED), and the Serious Fraud Investigation Office (SFIO).
A Deeper Look at the Case
The loan fraud case made headlines in 2019 and surprised the public. Chanda Kochhar, 59, was awarded the Padma Bhushan, India’s highest civilian honour, in 2011. She was also named to Forbes International’s ‘The World’s 100 Most Powerful Women’ list for seven consecutive years, as well as TIME magazine’s ‘100 Most Influential People in the World’ list in 2015.
Deepak Kochhar’s NuPower Renewables received Rs 64 crore in funding from one of Venugopal Dhoot’s companies via unsecured fully convertible debentures (FCDs), just weeks after the Videocon group received a Rs 3,250 crore loan from ICICI Bank. During Chanda Kochhar’s tenure at ICICI Bank from 2009 to 2011, six loans totaling Rs 1,875 crore were allegedly sanctioned for the Videocon Group and its associated companies.
The Kochhar couple, Dhoot, and others were charged with money laundering by the Enforcement Directorate in 2019. According to media reports, Venugopal Dhoot invested Rs 64 crore in Nupower Renewables through Supreme Energy Pvt Ltd (SEPL) and transferred SEPL to Pinnacle Energy Trust managed by Deepak Kochhar via an indirect route, and most of the loans made during Chanda Kochhar’s tenure became non-performing assets, resulting in a Rs 1,730 crore loss to the bank.
The CBI claimed that the loan was approved by a committee on which Kochhar served. According to the investigation agency, she abused her official position and “received illegal gratification/undue benefit from Dhoot through her husband for sanctioning loans to Videocon.” In a statement, Chanda Kochhar refuted the allegations, saying, “I reiterate that none of the credit decisions at the bank are unilateral… the organisation design and structure obviate the possibility of conflict of interest.”
Chanda Kochhar joined ICICI Bank in 1984 and rose through the ranks to become its Managing Director (MD) and CEO in 2009. In 2018, she resigned from her position. Following the resignation announcement, the stock of the country’s largest private lender increased nearly 6% to Rs 320 on October 4, 2018. On January 28, 2019, ICICI Bank shares fell 4% to a seven-week low of Rs 341.65 after the CBI filed a case against Chanda Kochhar, Deepak Kochhar, and Venugopal Dhoot. On Friday, December 23, 2022, its shares closed 1.26% lower at Rs 879.20.
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