ICICI has denied any wrongdoing, clears Chanda Kochhar
ICICIBSE -1.94 % Bank CEO Chanda Kochhar sat on the bank’s credit committee that sanctioned a loan of Rs 3,250 crore to the Videocon group in 2012, the private lender’s chairman MK Sharma told reporters in Mumbai on Thursday. The bank, he added, did not see the need for her to recuse herself from the discussion as VideoconBSE -4.39 % is not an investor in the renewables company floated by Ms Kochhar’s husband.
ICICI Bank’s second clarification-cum-statement in two days on this issue comes amidst a swirl of speculation about possible conflict of interest in the way Ms Kochhar and the bank handled the sanction of loan to the Videocon group in 2012. Media reports have suggested that Videocon’s promoter Venugopal Dhoot was one of the first investors in a renewables company promoted by Ms Kochhar’s husband Deepak Kochhar called NuPower Renewables in 2008. He subsequently sold his stake but companies controlled by him or associates close to him maintained a relationship with NuPower Renewables till early 2013 when its control was finally transferred to a trust controlled by Deepak Kochhar for what critics allege to be a piddly sum. Corporate governance experts have criticised the loan sanction especially in the light of the odd arrangement between companies promoted by the Videocon group or Mr Dhoot which led to Mr Kochhar acquiring full control of NuPower for just Rs 9 lakh in 2012/13.
ICICI has denied any wrongdoing on its part and that of Chanda Kochhar. In a statement yesterday, the bank denied any conflict of interest and said that Videocon is not an investor in NuPower and that the renewables firm did not have a banking arrangement with ICICI. Mr Sharma reiterated the point on Thursday but also revealed Ms Kochhar’s presence in the credit committee which sanctioned the loan to Videocon in 2012. “The board does not see this as a conflict of interest in any manner since Videocon group is not an investor in NuPower renewables, as there was no need to recuse herself from this committee. This committee had many independent directors and the committee was not chaired by her.” Mr Sharma also explained that the loan disbursed to Videocon Group was part of a consortium arrangement where terms and conditions had already been agreed upon by the lender group.
Mr Sharma also revealed for the first time that the bank and Ms Kochhar had answered regulator’s queries satisfactorily on this issue.
“We have satisfactorily replied to the questions of all the regulators which is an ongoing process within a regulated entity like a bank and the regulators and the other government departments. However this is privileged information between the regulators and the bank and it would be totally inappropriate for me to go public with them,” Sharma said.
In January 2009 just after buying a stake in NuPower, Dhoot transferred his shares to Deepak Kochhar for Rs 2.5 lakh and resigned as director. But the association with the Dhoot family did not end there. In March 2010, NuPower got a loan of Rs 64 crore by a company named Supreme Energy, entirely owned by Mr Dhoot. At the end of the same month, Supreme Energy became a 94.99 percent shareholder in NuPower. The remaining shares were held by Mr Kochhar.
In November 2010, Dhoot transferred his entire stake in Supreme Energy to associate Mahesh Chandra Punglia. From September 2012 to April 2013, Punglia transferred his holding to Pinnacle Energy, a trust, where Deepak Kochhar was the managing trustee.
In a letter addressed to Prime Minister Narendra Modi dated March 15 2016, ICICI Bank shareholder Arvind Gupta alleged that the bank extended loans to the debt laden Videocon Group despite dubious track record mainly due to business relations between the Dhoots and Deepak Kochhar. The company ownership was transferred as a quid pro quo for loans, Gupta said.
Source: economictimes.indiatimes
