ICICI examines pending insolvency cases in Board meeting

ICICI examines pending insolvency cases in Board meeting

ICICI examines pending insolvency cases in Board meeting

Trouble seems to be mounting for ICICI bank CEO and MD Chanda Kochhar's husband Deepak Kochhar as the Income Tax Department has initiated their enquiry in the case. That is one side of the story.

The amount was part of the Rs 40,000-crore loan that the Videocon Group secured from a consortium of 20 banks led by SBI. It also backed Ms Kochhar saying "there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours".

How did this case come to light? The CBI is assessing for wrongdoings in the bank's lending practices, especially in disbursal of Rs 3250 crore to Videocon Group. Enforcement Directorate or ED too may step in to conduct a separate investigation to ascertain whether the Dhoot-Kochhar transaction involves misappropriation of funds, discrepancies in the deal, criminal breach of trust and breach of Foreign Exchange Regulation Act or FERA.

A bank official said the board meeting was routine in nature and refused to divulge any details whether the conflict of interest issue would be discussed.

"ICICI Bank's Board meeting being held today is a pre-scheduled Board meeting convened for review of cases which are before National Company Law Tribunal under Insolvency and Bankruptcy Code, and other routine matters". To begin with, Chanda Kochhar was not a chairperson of the committee that approved the loans. The total loan extended by the lenders' consortium to the Videocon Group, including Videocon Industries and 12 of its subsidiaries, was about ₹40,000 crore. Not only that, the role of Rajiv Kochhar, financial services company Avista Advisory founder and Chanda Kochhar's brother-in-law (her husband's brother), is also under the scanner.

The loan had recently made news after reports questioned it and linked it to a possible quid pro quo that Videocon group promoter Venugopal Dhoot allegedly had with NuPower Renewables, a company founded by Deepak Kochchar. At least, as a gesture of good corporate governance and to set an example, Kochhar could have stayed out of the Videocon loan decision. In the plea, ICICI said the company failed to repay a loan of Rs 3.13 billion to the bank after the 500-Mw hydropower project, which was supposed to be commissioned in 2012, remained unfinished. However, the revised invitations for the event circulated on Tuesday did not feature the name of the ICICI Bank CEO. However, it could only manage 78% subscription, raising Rs 3,500 crore from the market. The firm owned 241,869 shares of the bank's stock after selling 5,600 shares during the period.

Similarly, going by the information on the company's website, Value Industries posted a profit of Rs 3.5 crore for the year ended 31 December, 2011 as against a profit of Rs 16 crore in the previous year.

Following the sharp fall, the company's market valuation eroded by Rs 10,452.84 crore, to Rs 1,68,344.16 crore at close. Firstpost couldn't immediately reach the borrower companies including Evans Fraser. Here are five things to know about the ongoing controversy.

In a related development, officials at the Central Bureau of Investigation said that Deepak Kochhar, who had been named in their preliminary inquiry, would be called soon for questioning.

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