The Central Bureau of Investigation (CBI) has alleged that Venugopal Dhoot, Chanda Kochhar and her husband Deepak had chalked out a plan to give loans from ICICI Bank to Dhoot’s Videocon group after the private sector lender announced the appointment of Kochhar as its CEO and managing director.

The ICICI Bank board appointed Kochhar the bank’s MD and CEO in December 2008. In October 2018, Kochhar quit the post and went on an indefinite leave following allegations of nepotism and conflict of interest.

There were allegations of a quid pro quo arrangement on a loan to the Videocon group, involving Kochhar and her husband.

The accusation was that the Videocon group pumped money into NuPower Renewables, a firm owned by Deepak Kochhar.

In a more than 10,000-page chargesheet, the investigative agency said Chanda Kochhar lived in a flat owned by the Videocon group in Mumbai. The flat was transferred to her family trust where her husband was its managing trustee for a sum of only Rs 11 lakh in October 2016. The actual value of the flat was Rs 5.25 crore.

The CBI further alleged that Kochhar accepted “illegal gratification” of Rs 64 crore.

Deepak Kochhar conspired to get credit facilities sanctioned in favour of the Videocon group through Chanda Kochhar, according to the chargesheet.

The CBI said the credit facilities turned into non-performing assets (NPAs) of more than Rs 1,000 crore.

After she took charge as ICICI Bank’s CEO, six rupee term loans were sanctioned to the Videocon group.

The credit facilities later became NPAs in June 2017, with an outstanding amount of Rs 1,033 crore.

The total loss to the lender came at Rs 1,700 crore, including interest cost.

Bank view

ICICI Bank has reportedly said it followed due processes while granting loans to the Videocon group and the CBI’s allegations of wrongful loss and violation of rules are not factually correct.

Its legal head observed that the Videocon group could not repay the loans due to business failure. The bank noted that the bad loan was not a wrongful loss, but a business loss.

This has led to questions on the bank seeking the clawback of bonuses given to Chanda Kochhar.

The bank had earlier said that on December 8, 2016, Kochhar executed a clawback agreement with it under which the lender was entitled to a return of the previously paid variable pay or deferred variable pay in the event of a determination of gross negligence or an integrity breach by Kochhar.

ICICI Bank had filed a suit in the Bombay High Court where it alleged that Kochhar’s conduct had caused substantial embarrassment to the bank and all the stakeholders, and led to irreparable reputational loss.

The bank had also alleged that Kochhar flagrantly violated the ICICI group code of business conduct and ethics.

The lender has been seeking recovery of amounts towards the clawback of bonuses given to Kochhar from April 2006 to March 2018.