ICICI Bank CEO Chanda Kochhar. Photo: AFP

The former chief executive officer of ICICI Bank, Chanda Kochhar, and her husband Deepak Kochhar, have been named as suspects in a criminal case lodged by India’s premier investigation agency.

Charges lodged by the Central Bureau of Investigation (CBI) in the Videocon loan default case raises questions about endorsement of Kochhar by the bank’s board and internal inquiries it conducted into Kochhar’s activities.

ICICI Bank is India’s third-largest lender by assets and second largest private bank in the country.

The CBI lodged a first information report (FIR) that said the couple and a group of companies run by Deepak Kochhar were involved in an alleged conflict of interest in extending a loan of 32.5 billion rupees (US$457.3 million) loan to Videocon International Electronics Ltd, whose chairman and managing director Venugopal Dhoot has also been named. The 32.5 billion rupee credit amount was part of a total loan of 400 billion rupees sanctioned to the Videocon group by a 20-bank consortium.

The CBI also named current and former heads of the ICICI Bank including KV Kamath, Sandeep Bakhshi, NS Kannan, Zarin Daruwala, Rajiv Sabharwal, Sonjoy Chatterjee and Homi Khusrokhan. It alleged that these people were part of the various credit committees of ICICI Bank that sanctioned loans to the Videocon group, in violation of the bank’s credit policy.

‘Conflict of interest’

In December 2008, Dhoot had set up a company NuPower Renewable Ltd with Deepak Kochhar and two of his relatives and then gave a loan of 640 million rupees ($9 million) to this company through a fully owned entity. The businessman later transferred his ownership to a trust headed by Deepak Kochhar for 900,000 rupees ($12,663). The transfer of ownership reportedly happened six months after the Videocon Group got the loan from ICICI Bank. The Videocon account was in 2017 declared a non-performing asset by the bank.

The CBI FIR notes that Chanda Kochhar was one of the members of the sanctioning committee that disbursed loans to Videocon. While the loan was sanctioned on September 7, 2009, the next day Dhoot transferred a sum of 640 million rupees to NuPower. The agency alleged that Chanda Kochhar got illegal benefit via her husband from Dhoot.

Bank’s conduct

When the allegations first surfaced in March 2018 the ICICI bank board gave Chanda Kochhar a clean chit, denying any nepotism or conflict of interest and voiced faith in her.

However, investigators took a different view. The CBI has charged Chanda Kochhar, her husband and Dhoot with an offense and registered a criminal case.

The bank had claimed there are adequate checks and balances in loan appraisal, rating and approval processes and no individual employee, irrespective of the position he or she holds, has the ability to influence the bank’s credit decision at the bank.

But the CIB alleged that various sanctioning committees of ICICI Bank cleared loans to Videocon Group companies to enable them to repay the unsecured loan availed from VIL. Further, a loan was sanctioned to VIL to refinance the company’s existing loans. The agency claimed these loans were sanctioned in violation of credit policy of the time.

Chanda Kochhar resigned in October and was replaced by Sandeep Bakhshi, the former head of ICICI’s life insurance arm. The bank’s net profit for the three months to September 30 nearly halved to 9.09 billion rupees ($124 million), compared with 20.58 billion rupees a year earlier.

——

Asia Times has relaunched on www.asiatimes.com. Download our brand new native App for a sweeping selection of geopolitical and business news from across Asia.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

Join the Conversation

9 Comments

  1. Hello would you mind letting me know which web host you’re working with? I’ve loaded your blog in 3 different web browsers and I must say this blog loads a lot faster then most. Can you recommend a good web hosting provider at a fair price? Thank you, I appreciate it!

  2. I’m not positive the place you’re getting your info, however good
    topic. I must spend a while learning much more or figuring
    out more. Thanks for excellent information I was in search of this info for my mission.

  3. Heya just wanted to give you a quick heads up and let you know a few of the pictures aren’t loading correctly.
    I’m not sure why but I think its a linking issue.
    I’ve tried it in two different browsers and both show the same outcome.

  4. I needed to thank you for this very good read!! I certainly enjoyed every bit
    of it. I have got you saved as a favorite to look at new things you post…

  5. Hi there are using WordPress for your blog platform?
    I’m new to the blog world but I’m trying to get started and
    set up my own. Do you need any coding expertise to make your own blog?
    Any help would be greatly appreciated!

Leave a comment

Your email address will not be published. Required fields are marked *