Game of cons
The Machiavellian nexus between ICICI and Videocon has finally gone beyond discretion. Almost a year after the preliminary enquiry was initiated by CBI to probe the allegations levelled against Padma Bhushan Chanda Kochhar, one of India's most celebrated woman bankers, her husband Deepak Kochhar and Venugopal Dhoot, MD of Videocon group, an FIR was lodged late Wednesday night for alleged cheating and corruption in sanctioning loans to the company which caused a loss of ₹1,730 crore to the bank. The ICICI-Videocon loan fraud episode came to light after Arvind Gupta aka the whistleblower first accused Kochhar of nepotism and favouritism in granting loans. It was alleged how ICICI bank had broken the code of conduct and granted loans to Videocon group and its subsidiaries. Of course, at the helm was Chanda Kochhar who took over as ICICI MD & CEO in May 2009. Misusing her official position, Kochhar was accused of being instrumental in sanctioning of high-value loans to Videocon group and its subsidiaries, and in the process was the recipient of "illegal gratification/undue benefit through her husband from Videocon Industries/VN Dhoot for sanctioning rupee-term loan of ₹300 crore to Videocon International Electronics Ltd. and disbursed on September 7, 2009" as the CBI FIR states. Then, between 2009 and 2011, more loans were granted to companies owned by Dhoot and family such as Millennium Appliances (175 crores), Sky Appliances (240 crores) and Videocon Industries (750 crores). Interestingly, the company named in the FIR – NuPower Renewables, was jointly set up by her husband Deepak and Dhoot on an equal share. However, Dhoot sold off his shares to Deepak and instead loaned 64 crores to NuPower in March 2010 via Supreme Energy, owned by Dhoot himself. A nexus of share transfers ensured that Supreme Energy had major ownership in NuPower. While Dhoot successfully entangled the entire ownership and fund transfer case possibly to derail SEBI – as is expected – he transferred the entire stake in Supreme Energy to his associate Mahesh Chandra Punglia. In 2012, ICICI sanctioned ₹3,250 crores to Videocon. Meanwhile, between 2012-13, Punglia transferred his 99.9 per cent stake to Pinnacle Energy Trust, where Deepak was reported to be a trustee. So the story which began from Deepak to Dhoot, meandered all the way through different companies, before finally arriving at Deepak again. Indeed, Dhoot lived up to the rupee-term loan which was sanctioned to him, for he did expand and diversify the project – his personal project accruing spoils of gross corruption. In came the whistleblower who wrote to PM and FM in 2016 and before matters were taken seriously, Videocon account was declared a non-performing asset (NPA) in 2017. Almost 86 per cent of the loans (₹2,810 crores) remained unpaid. The FIR added how this NPA accounted to wrongful loss of the lender, and simultaneously, came in as a wrongful gain for the borrowers and accused. A classic case of quid pro quo was exercised between Dhoot and Kochhar, which the whistleblower terms as only the "tip of the iceberg". The matter only became hugely pertinent when the whistleblower's letter surfaced in social media in March last year, following which ICICI bank shielded Kochhar by terming the allegations as baseless and unsubstantiated. This caught CBI and SEBI's attention. Both sparked probe against the accused trio. SEBI's notice to the bank in May 2018 was acknowledged as its internal probe, led by former SC judge BN Srikrishna, alleged conflicts of interest. Even ICICI could not protect Kochhar hereafter. Meanwhile, Kochhar left on leave in June, only to never assume office again and ultimately step down as the CEO on October 4, 2018, following the aggravated situation, giving the baton to interim head Sandeep Bakshi. The fact that Kochhar and Dhoot could elude a probe for so long should not come as a surprise given the twists and turns they took over the course of their deceitful plot. It is not every day that a Padma Bhushan is made synonymous with grave fraud. On the flip side, it also exposes the credibility of people at positions of immense responsibility. "Tip of the iceberg" statement from the whistleblower subtly hints at the nexus of ploys plausibly at play, though yet to be uncovered. At the same time, this constitutes to the grievous problem of NPAs that have plagued the lenders of the country. Joining the dots gives a picture of how Indian lenders have been in gross discomfort. Succumbing to these defrauds, PSBs had to be rescued by Centre in a massive recapitalisation plan. Now, more eminent bankers from leading private banks are under the scanner, some formerly part of ICICI in that period of Kochhar's corruption ploy. The picture gets clearer with every passing day how those in their powerful capacity exploited the system and public money, drawing massive advantage in the process.