From Videocon to Avista, troubles mount for Chanda Kochhar-led ICICI Bank: The story so far

Days after the Central Bureau of Investigation (CBI) registered a preliminary enquiry against Deepak Kochhar, the husband of ICICI Bank MD and CEO Chanda Kochhar, to determine alleged wrongdoing in the sanctioning of a Rs 3,250 crore ICICI loan to the Videocon Group, a second alleged quid pro quo deal has surfaced. The latest allegation reportedly involves Chanda Kochhar’s brother-in-law Rajiv Kochhar. According to The Indian Express, ICICI Bank mandated Avista Advisory Group, a Singapore-headquartered financial services company founded by Rajiv Kochhar, to restructure foreign currency-denominated debt deals worth over $1.7 billion of seven companies over the past six years. “All these companies were borrowers of ICICI Bank at the same time. In at least one of these deals, ICICI Bank was the lead bank of the lenders,” the newspaper reported. [caption id=“attachment_4416849” align=“alignleft” width=“380”] From Videocon to Avista, troubles mount for Chanda Kochhar-led ICICI Bank: The story so far. Reuters image.[/caption] The Indian Express report claims that Avista acted as an advisor in restructuring the debt of Jaiprakash Associates, Jaiprakash Power Ventures, GTL Infrastructure, Suzlon, JSL and the Videocon Group. The bank has categorically denied any business relation with Avista. Rajiv Kochhar has also said that he or his firm do not have any business arrangements with ICICI Bank, according to the  Mint. “Almost all our clients are foreign and these reports linking Avista with ICICI Bank are completely baseless and malicious,” Rajiv Kochhar was quoted as saying by Mint. Here’s what we know so far about controversies surrounding ICICI Bank: ICICI Bank’s loan to a Videocon group company A Firstpost investigation on Tuesday revealed that one of the five companies in the Videocon Group, Evans Fraser & Company India Limited, was lent Rs 650 crore in 2012, despite the fact that the firm had net sales of just Rs 75 crore in 2011 and a net profit of Rs 94 lakh. The corresponding figures in the previous year were Rs 59.2 crore and a loss of Rs 6.4 crore. In short, Evans Fraser & Company India Limited was handed a loan that was close to nine times its total sales. Govt delayed SFIO request to probe Videocon-ICICI link?  India Today, on Tuesday, citing a confidential letter mailed by the Serious Fraud Investigation Office (SFIO) in Mumbai to its headquarters in New Delhi, indicated that the government was sitting on a request that had asked for a probe into the Videocon-ICICI Bank link. The Mumbai office of the SFIO has now sought a go-ahead from its headquarters to investigate the matter, according to this Indian Express report. ED not investigating the matter, says ICICI Bank  The Business Standard On Monday reported that the Enforcement Directorate (ED) initiated an enquiry into the Rs 3250 crore ICICI loan sanctioned to the Videocon group and others. The newspaper cited sources claiming that the agency wrote to the Securities and Exchange Board of India (SEBI) and sought information on the Videocon group. The Business Standard report also said that the ED asked for details of the investigation into the group’s activities over the past few years. ICICI Bank, later that day, put out a statement dismissing the news report. “We confirm that ICICI Bank Ltd has not received any communication from the Enforcement Directorate relating to the any enquiry into the loan to Videocon Group as on date.” ICICI Bank scrip plunges to five-month low Shares of ICICI Bank plunged  seven percent to a five-month low in morning trade on Monday, after the media reported that its lending practices were the subject of a police investigation. Venugopal Dhoot denies wrongdoing  Videocon Group chairman Venugopal Dhoot on Monday denied any dealings with Deepak Kochhar, beyond investing Rs 2.5 lakh in Deepak’s clean energy business - NuPower Renewables. Dhoot termed reports of subsequent events, including loaning Rs 64 crore to Nupower through one of his companies, or subsequent transactions which resulted in him giving Deepak Kochhar full ownership of the company, as baseless. “Our transaction is very clear and I have not done anything wrong, and will not do anything wrong…We have not invested any money in any company floated by Deepak Kochhar. We invested Rs 2.5 lakh, pulled it out and now there is no relation between us,” Dhoot said in an interview aired on Marathi channel ABP Majha. ICICI Bank’s board backs Kochhar The ICICI Bank's board on 28 March moved to put to rest rumours that Chanda Kochhar allegedly favoured the Videocon Group in its lending practices, terming the rumours “malicious and unfounded”. The bank’s board, in a regulatory filing, said it “has come to the conclusion that there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours." With inputs from agencies