Feb 10, 2019

Gyaankosh – Videocon-ICICI Bank Loan Controversy

Posted by Genesis Mentors | Leave a reply

What’s the controversy?

 

  • The Videocon-ICICI Bank loan controversy is centred around the concern being raised by an activist in March 2018, who alleged conflict of interest and a possible quid pro quo in lending to Videocon group by Chanda Kocchar and certain members of her family. The lack of disclosures by the bank also raised eye brows in the media and other circles.
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  • The controversy gained traction when an internal whistle-blower raised another complaint against Kocchar of not following the bank’s code of Conduct in late May 2018.
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  • Following reports of complaint, the board announced a detailed probe by an external expert into the allegations. Retired Supreme Court Judge B N SriKrishna accepted the request from the bank to head the probe panel.
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  • Chanda Kocchar decided to go on indefinite leave till the completion of the enquiry after she was forced by the bank to do so.
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  • As per whistle-blower’s first set of allegations pertains to Kochhar’s impropriety while lending to the cash-strapped Videocon Group and companies associated with the Ruia family, the promoters of beleaguered Essar Group.
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  • A detailed allegation revealed that ICICI Bank extended ₹3,250 crore to Videocon Group in 2012. It is believed that Chanda Kocchar’s husband Deepak Kocchar first sanctioned the loan and then restructured the loan through Avista Advisory, a firm run by Deepak’s younger brother Rajiv Kochhar.
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  • It is also alleged that NuPower, a company promoted by Videocon group and Deepak got investments of ₹ 325 crore from the Mauritius-based Firstland Holdings, a firm owned by Nishant Kanodia, the son-in-law of Essar Group co-founder Ravi Ruia.
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  • On 19th June 2018, the bank appointed Sandeep Bakhshi as its Chief Operating Officer, who was previously MD and CEO of ICICI Prudential Life Insurance.
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  • On 4th Oct 2018, Chanda Kocchar stepped down from her position following allegations of corruption.

 

Recent Developments

 

  • On 24th Jan 2019, Chanda Kochhar, her husband Deepak Kocchar and industrialist Venugopal Dhoot were named in a CBI enquiry for cheating and defrauding ICICI Bank for approximate amount of ₹1,730 crore.
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  • After CBI enquiry, the Enforcement Directorate lodged a case of money laundering against Chanda Kocchar in connection with loans disbursed by bank to the Videocon Group which later turned into NPAs.
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  • The final jolt in the case came when on 30th Jan 2019, an independent enquiry panel set up ICICI Bank indicted Chanda Kochhar for violating regulations and following which her service was terminated. The bank also decided to stop all her unpaid retirement benefits and recover bonuses paid since 2009.
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  • ICICI bank on the same day, announced Sandeep Bakhshi as its full time Managing Director and Chief Operating Officer.
 

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