This is how one of the most powerful women in Indian business fell from top at India Inc
The FIR lodged by the CBI on Thursday against ex-ICICI Bank MD and Chief Executive Chanda Kochhar, her husband Deepak Kochhar and industrialist V N Dhoot besides four companies and the investigation agency`s raids on four locations in Maharashtra mark a critical stage in the case of a Rs 3,250 crore bank loan involving the Videocon Group that dates back to 2012. The amount was part of a Rs 40,000-crore loan which Videocon got from a consortium of 20 banks led by state-run State Bank of India.
Chanda Kochhar`s alleged conflict of interest came out in the open in March last year after media reports referred to the loan granted by ICICI Bank to Videocon Group, whose chairman Venugopal Dhoot had business links with her husband Deepak Kochhar. It was alleged that Dhoot transferred a considerable portion of the loan to a company he jointly owned with Deepak Kochhar. Image source: PTI
The media expose was based on a complaint filed by a whistleblower, who flagged Kochhar`s alleged impropriety and conflict of interest in a letter to the Prime Minister and the Finance Minister. The CBI registered a preliminary inquiry about Videocon Chairman Venugopal Dhoot allegedly paying crores of rupees to a firm promoted by Deepak Kochhar and a few relatives six months after Dhoot`s group got the Rs 3,250 crore loan from the ICICI Bank. Image source: Reuters
The conflict of interest and governance issues arise from the fact of Kochhar being on the credit committee which cleared the Rs 3,250 crore loan in 2012. The firm at the core of the controversy is NuPower Renewables, in which Videocon`s Dhoot transferred his newly purchased stake to Deepak Kochhar for Rs 2.5 lakh in January 2009 and resigned as director. Image source: Reuters
Thereafter, in March 2010, NuPower got a loan of Rs 64 crore from a company called Supreme Energy wholly owned by Dhoot. Soon after, while Supreme Energy became a 94.99 per cent shareholder in NuPower, the remaining shares were held by Kochhar. Initially terming the charges against Kochhar as "malicious and unfounded rumours", the bank, coming under pressure, ordered a probe into the whole issue. Image source: Reuters
However, ICICI Chairman M.K. Sharma had then said: "The board does not see this as a conflict of interest in any manner since Videocon group is not an investor in NuPower Renewables, as there was no need to recuse herself from this committee. This committee had many independent directors and the committee was not chaired by her." Image source: Reuters
Chanda Kochhar, who proceeded on leave in June, quit her post seeking premature retirement on October 4, 2018. Her tenure as CEO of ICICI Bank was to end on March 31, 2019. Kochhar was appointed to the post in 2009. Image source: Reuters