Where Did The 3250 Crores Go?
Last week the arrest of ICICI's CEO and MD Chanda Kocchar and husband Deepak Kocchar has opened a pandoras box of all that is lacking in the governance of private sector banks. This arrest served as a wake up call for private sector banks, and willful defaulters, that they will not be spared from state action.
What happened?
The Kocchars were arrested by the CBI (Central Board of Investigation) in connection with alleged corruption case of INR 3250 crore provided by ICICI to Videocon Group. The CBI was also arrested by Videocon Group founder Venugopal Dhoot in the case under allegations of cheating, criminal conspiracy, and allegations under Prevention of Corruption Act.
How it all began
In 2016, a whistle-blower named Arvind Gupta had reported fowl play between ICICI Bank, Videocon Group and NuPower Renewables a company that was promoted by Deepak Kochhar. When probed in 2018, many irregularities came up.
On one side are the Kocchars, and the other side is Vidoecon group and Dhoot. The latter approached ICICI Bank for a loan where Chanda Kocchar was an MD. While granting a loan, the bank has to disclose if they have any personal relations in the company they are granting their loan to. If there is any personal interest you cannot grant loan to that company. The MD did not declare her indirect association with Videocon Group via her husband. The loan sanctioned by ICICI Bank was utilised by Videocon in another company called NuTech. In NuTech, 50 per cent stake was of Videocon’s owner and the remaining was on Deepak Kocchar. This was the biggest irregularity in the case.
It was alleged that a company related to Dhoot invested INR 64 cr in NuPower in 2010 (of which Deepak Kochar was a promoter). Later the proprietorship was transferred to a trust owned by Deepak Kocchar for INR 9 lakh after Videocon received INR 3250 cr from ICICI Bank in 2012. In 2019, CBI launched an inquiry against Dhoot, Kocchars, NuPower and Videocon Group for allegedly duping ICICI Bank of INR 1730 Cr. Case was filed under Indian Penal Code and The Prevention of Corruption Act. The assets have been classified as Non Performing Assets in 2017.
Some findings of the inquiry include six loans granted from 2009 to 2011 worth INR 1,875 crore to Videocon Group in violation of all ethical practices. Kocchar had gone on indefinite leave after these allegations surfaced and stepped down from the post of CEO and MD in 2018. After an internal inquiry by ICICI Bank which allegedly found violation of disclosure norms, the bank declared Kocchar’s exit will be a dismissal and not a regular resignation. In September 2020, ED arrests Kocchar’s husband and on December 23, 2022, CBI arrests Chanda Kocchar, and on December 26, 2022, they arrest Venugopal Dhoot. The entire episode has come as a shocker for not only the Indian banking industry but the populace at large.
The question that plagues the public is where the 3250 crore go? Irrespective of the action taken against the accused, it is time to raise issues that concern the public, since it is the public exchequer that is suffering.
