ICICI CEO Chanda Kochhar Troubled In Videocon Loan Case

CEO and MD of ICICI Bank Chanda Kochhar is in the middle of a controversy. Indian Express published an investigative report claiming a series of transfer of shares between her husband Deepak Kochhar and two of their relatives and Venugopal Dhoot of Videocon group, relating to their partnership venture NuPower, Dhoot’s Supreme Energy and Pinnacle Energy Trust.

The report claims that through their internal settlement, Videocon received a loan of Rs. 3,250 crore from ICICI Bank while Kochhar’s husband got a ‘sweet deal’ of Rs 64 crore. ICICI bank has also converted Videocon’s total current exposure of Rs 2,849 crore into non-performing assets (NPA).

However, ICICI Bank board of directors have called the claims against Kochhar ‘malicious and unfounded rumours’. The banking institution supported Kochhar in the loan deal of Videocon Industries on Wednesday (March 28). The board members denied any accusation of favouritism and conflict of interest.

In a press statement, it said that it has “full confidence and reposes full faith” in Kochhar.

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“ICICI Bank’s share of the banking sector’s exposure to the Videocon group was less than 10% while around 90% of the loans were sanctioned by other banks and financial institutions. Hence, the Board concluded that there is no question or scope of any favouritism, nepotism or quid-pro-quo,” added the release.

The bank’s board members re-examined the internal process. It said, “no individual employee, whatever may be his or her position, has the ability to influence the credit decision at the bank,” in a BSE filing after the Board meeting.

ICICI Bank’s share of the banking sector’s exposure to the Videocon group was less than 10% while other banks and financial institutions sanctioned around 90% share

Kochhar has served the company for 33 years.

It clarified that a group of over 20 banks and financial institutions sanctioned loans to the Videocon group for a debt consolidation programme and for the group’s oil and gas capital expenditure programme aggregating approximately Rs. 40,000 crore. ICICI had only 10% share which came up to Rs 3,250 crore and the rest was provided by others.

About Kochhar’s involvement in the deal, ICICI board clarified that the Credit Committee of ICICI Bank in 2012 sanctioned its share of facilities in the syndicated arrangement to the Videocon group. “This Committee was chaired by the then Chairman of ICICI Bank and it included independent and working Directors of the Bank. It is important to note that Ms. Chanda Kochhar was not the Chairperson of this Committee.”

Kochhar has not spoken up about the allegations made by Indian Express yet in the media.