CBI books Kochhars, Dhoot over loan fraud

Deepak Kochhar,Chanda Kochhar,Venugopal Dhoot
Former chairperson ICICI Bank Chanda Kochhar at a press conference in Mumbai on September 8, 2017.(PTI Photo)

The Central Bureau of Investigation (CBI) on Thursday said it has registered a case of criminal conspiracy and fraud against ICICI Bank’s former chief executive officer (CEO) and managing director (MD) Chanda Kochhar, her husband Deepak Kochhar, and Videocon Group head Venugopal Dhoot, 13 months after it started an investigation into alleged irregularities in loans sanctioned to the Videocon Group companies.

Kochhar resigned from the bank last October. When contacted, Dhoot said: “I cannot talk about it at the moment.” The Kochhars didn’t reply to phone calls and messages seeking comment. ICICI Bank did not respond to an emailed query.

The federal investigation agency was looking into a possible quid pro quo where Kochhar may have favoured Videocon, which had an investment in a firm promoted by her husband Deepak Kochhar. She initially denied there was any conflict of interest, and the bank’s board backed her at first. The agency’s investigation officer has also recommended that the role of other senior ICICI Bank officials, Sandeep Bakshi, K Ramkumar, Sonjoy Chatterjee, Zarin Daruwala, Rajiv Sabharwal, KV Kamath and Homi Khusrokhan, be looked into. HT has seen a copy of the first information report (FIR) of the agency which lists these names, although they have not been accused of anything.

The names include those of some of the bank’s directors (including non-executive directors). Some of the names are of people who were on the bank’s credit committee, which signed off on the Rs 3,250 crore loan to Videocon in 2012.

Daruwala has left the bank and is now the CEO of Standard Chartered Bank’s Indian operations. Kamath is now head of the BRICS bank. Chatterjee too has left the bank and is the CEO of Goldman Sachs India. Khusrokhan is an independent director on the board of the bank. Sabharwal has also left the bank and is now the CEO of Tata Capital.

Bakshi took over as CEO and MD of the bank after Chanda Kochhar resigned.

Following the registration of the FIR, agency officers on Thursday carried out searches at four premises of Dhoot’s Videocon Group and Deepak Kochhar’s company Nupower Renewables in Maharatshtra’s Aurangabad and Mumbai.

Besides the Kochhars and Dhoot, the FIR names four companies, Nupower Renewables Ltd (NRL), Supreme Energy Pvt Ltd (SEPL), Videocon International Electronics Ltd (VIEL) and Videocon Industries Ltd (VIL) as accused along with “other unknown private persons” and “unknown public servants”.

“It was alleged that the accused sanctioned certain loans to private companies in a criminal conspiracy with other accused to cheat ICICI Bank,” said a CBI spokesman.

Curiously, a day after registration of the FIR on January 22,the supervisory officer of the case, superintendent of police Sudhanshu Dhar Mishra found himself caught in the maze of mass transfers ordered by CBI’s interim director M Nageswara Rao.

Ever since being given interim charge of the agency on January 10, Rao has assigned and reassigned at least two dozen officials of the agency.

An order issued by the agency’s personnel wing on January 23 transferred Mishra, an Indian Revenue Service officer, on deputation to CBI in Ranchi.

The FIR was filed after CBI said its preliminary enquiry found enough evidence of a quid pro quo.

“It was also alleged that as a part of quid pro quo, Sh VN Dhoot made an investment of ~64 crore in M/S Nupower Renewables Ltd (NRL) through M/S Supreme Energy Pvt Ltd (SEPL) and also transferred M/S SEPL to Pinnacle Energy Trust managed by Deepak Kochhar through a circuitous route between 2010 and 2012,” said the FIR.

CBI’s preliminary enquiry, conducted by the agency’s inspector DJ Bajpei, revealed that between June 2009 and October 2011, ICICI Bank transferred six high-value loans to various companies of the Videocon Group.

As per the enquiry, on August 26, 2009, a rupee term loan of Rs 300 crore was sanctioned to an accused company, VIEL, in contravention of the rules and policy by the sanctioning committee.

On September 7, 2009, the loan was disbursed to VIEL, and the next day Dhoot transferred Rs 64 crore to M/S NRL, managed by Deepak Kochhar. The money was transferred by Dhoot from another accused company, VIL, through M/S SEPL which also belonged to the Videocon Group promoter, the enquiry found, according to CBI.

The FIR says this was first major capital received by NRL to acquire its first power plant. The agency termed it as “illegal gratification/undue benefit” .

NRL was incorporated on December 24, 2008, with three directors – Deepak Kochhar, VN Dhoot and Saurabh Dhoot. On January 15, 2009, VN Dhoot and Saurabh Dhoot resigned from the directorship of the company. But before resigning, VN Dhoot allotted 1,997,500 warrants to Deepak Kochhar at the rate of ~10 per warrant on an initial payment of Rs 1 per warrant. On June 5, 2009, an equal amount of shares of M/S NRL held by VN Dhoot and Deepak Kochhar (under another company Pacific Capital Services Pvt Ltd) was transferred to M/S SEPL, which then became 95% shareholder of M/S NRL.

The enquiry also revealed that M/S SEPL was incorporated in July, 2008, and Dhoot resigned from the directorship of the company on January 15, 2009, the same day he and Saurabh Dhoot also resigned from the directorship of M/S NRL. Subsequently, VN Dhoot transferred control of M/S SEPL to Deepak Kochhar-managed Pinnacle Energy Trust (PET).

ICICI Bank also sanctioned five other rupee term loans totaling Rs 1,575 crore between 2009 and 2011 to five other companies that belonged to VN Dhoot, according to CBI. These loans turned non-performing assets (NPA) resulting in wrongful loss to the ICICI Bank, the agency said. The agency enquiry officer also alleged that ICICI Bank released security available in the form of fixed deposit receipts of ~50 crore in the account of two Dhoot associated companies “without any justification”.

The FIR said that as on April 26, 2012, the outstanding amount in the six loan accounts was adjusted in rupee term loan of Rs 1,730 crore and it sanctioned under the refinance scheme of domestic debt. On June 30, 2017, the account of VIL and its group companies were declared NPAs.