Chanda Kochhar, Former ICICI Bank CEO allegedly received INR 64 crore illegal gratification- Videocon Loan Scandal

Chanda Kochhar, 64 Crore Illegal Gratification and the Videocon Loan Scandal

In accordance to the Central Bureau of Investigation (CBI), former ICICI Bank CEO and MD, Chanda Kochhar obtained an unlawful gratification of INR 64 crore ($8.7 million) for her involvement in the Videocon loan matter. The CBI stated these assertions while requesting that a special court hear the case against Kochhar, her partner Deepak Kochhar, Videocon Industries Chairman Venugopal Dhoot, the chartered accountant of their company, Dattatraya Kadam, along with five others.

Kochhar, who worked as the MD and CEO of ICICI Bank from May 2009 to January 2019, has been accused of conspiring along with the remainder of the accused to get credit facilities for the Videocon Group, according to the 11,000-page charge-sheet submitted in April.

About Chanda Kochhar

Chanda Kochhar is a well-known Indian banker who previously held the position of the CEO and managing director of ICICI Bank, which is among India’s major privately owned banks. Kochhar, who was born on November 17, 1961, in Rajasthan, India, joined ICICI Bank in 1984 and was instrumental in its development and transformation. Before assuming the position of CEO and MD in 2009, she held numerous critical positions inside the firm.

Kochhar’s stint at ICICI Bank was distinguished by her attempts to increase the bank’s retail banking sector and to concentrate on technologically driven innovations. ICICI Bank grew significantly under her leadership and became a prominent participant in the Indian banking market. Kochhar was largely recognized as one of the most powerful and accomplished women in Indian business.

Her career, however, came under examination and criticism as a result of the Videocon loan scandal. The matter garnered a lot of coverage in the press, and it has affected Kochhar’s professional standing.

Kochhar resigned as ICICI Bank’s CEO and MD in October 2018 after claims that she favored Videocon Group in the loan clearance process. The CBI gained permission from ICICI Bank to charge Kochhar last month, and the case had the preliminary hearing on July 3. The CBI opened an investigation into suspected irregularities in providing RTLs valued INR 1,875 crore to six entities during Kochhar’s term as MD and CEO of ICICI Bank in January 2019. The loan amount was subsequently decreased to INR 1,730 crore following reorganization, with INR 1,033 crore still due, according to the agency.

Case by CBI

A Lemozine, the CBI’s special prosecutor, presented the information gleaned during the investigation. Lemozine said that Kochhar and the other defendants colluded to approve credit facilities for the Videocon Group companies even though they were ineligible for loans. The ICICI Bank committee of directors, led by Chanda Kochhar, approved a rupee term loan (RTL) of INR 300 crore to Videocon International Electronics Limited on August 26, 2009, according to the CBI.  On September 7, 2009, a vast network of Videocon enterprises distributed the loan. The CBI asserts that at around the same period, INR 64 crore was allegedly sent to Videocon Industries under the pretense of making a monetary investment with NuPower Renewable Ltd, a business connected to Deepak Kochhar.

The agency further said that Kochhar sanctioned two loans for Videocon International Electronics Limited (VIEL) and Videocon Industries Limited (VIL) totaling INR 300 crore and INR 750 crore, respectively. The day following the loan had been granted, Dhoot moved INR 64 crore of the 300 crore rupees sanctioned to VIEL to Deepak Kochhar’s business.

The CBI additionally claimed that ICICI Bank unjustifiably released security in the shape of a INR 50 crore fixed deposit in the accounts of other group firms, M/s Sky Appliance Limited as well as M/s Techno Electronic Limited. Lemozine contended that Kochhar stole bank cash for personal purposes and collected INR 64 crore in unlawful rewards.

Regarding the Churchgate apartment, Lemozine said that Kochhar had purchased a residence for her and her husband from the Videocon firm in 2016 and then transferred it to her family trust for a minimal sum of INR 11 lakh in October 2016. The CBI reported to the court that Kochhar knew this was an “inadequate consideration” given the flat’s 1996 worth, which was not less than INR 5.25 crore. Moreover, in November 2021, Kochhar’s son paid INR 19.11 crore for an apartment on the very same floor within the same building.

Chanda Kochhar accepted/obtained illegal gratification other than legal remuneration of Rs. 64 crore as a motive/reward, and also thereby misappropriated the bank’s fund for her own use.

– A Lemozine, CBI Prosecutor

The CBI earlier this month notified the court saying the board of the ICICI Bank has authorized the prosecution of Kochhar pursuant to the Prevention of Corruption Act. When deciding whether to charge her, the board took into account the INR 64 crore deal involving her husband’s company, even though it was accepted that the bank suffered no unjust loss in the Videocon loan transaction.

Kochhar as well as her husband were detained by the CBI in December of last year, but the Bombay High Court later granted them temporary release. The CBI alleges that in contravention of the Banking Regulation Act, RBI norms, and the bank’s credit policy, ICICI Bank issued credit facilities worth INR 3,250 crore for businesses under the Dhoot-promoted Videocon Group.