The Enforcement Directorate (ED) on November 20, assured the Supreme Court that it did not take any strict action against former ICICI Bank CEO and MD Chanda Kochhar during the whole money laundering case. Following the reassurance given by Solicitor General Tushar Mehta, a bench of Justices headed by Sanjay Kishan Kaul, adjourned the hearing on the plea by Ms Kochhar, that challenged the arrest of her husband Deepak Kochhar within the case.
After two months following the arrest of Mr Kochhar by ED in September 2020, the bench sat to bring out a decision.
According to news reports, the evidence about six loans, to the tune of Rs 1,875 crore that ICICI bank has sanctioned to Videocon Group between 2009 & October 2011.
Over the past couple of years, Ms Kochhar and her husband have had many businesses with Venugopal Dhoot, Videocon Group promoter. Throughout the investigation, Mr Kochhar was not cooperating and was arrested by the ED. The enforcement agency is additionally probing two other loans sanctioned by ICICI Bank during Ms Kochhar’s tenure to Gujarat-based pharmaceutical firm Sterling Biotech and Bhushan Steel Group – both are being investigated for alleged money laundering charges.
According to the allegations made, Mr and Ms Kochar had laundered money that was given as loans to Videocon by ICICI bank. Later on, these loans got converted into non-performing assets. (NPAs). The allegations suggest that Mr Dhoot invested crores in NuPower, just a couple of months after his loan was sanctioned.
According to the ED, Videocon invested in companies held by Mr Kochhar in exchange for the loans that were taken. In the wake of these allegations, Ms Kochhar took early retirement in October 2019.
The Ministry of Corporate Affairs and the tax department concluded in their report that RS. 64 crore illegal payment was received by Mr Kochhar from Videocon, in the form of layered transactions. While the transactions were filed under ‘business expenses’ by Kochhar’s company, the ministry suggested they weren’t genuine.
Moreover, the reports suggest that the Videocon group had no intention to cover these transactions. ED had claimed that Ms Kochhar and her family acquired an apartment at Mumbai owned by one among the Videocon group Companies, by way of obtaining that Company through her family trust at a nominal price, by creating book entries.
ED had registered an Enforcement Case Information Report (ECIR) within the matter supported a CBI FIR in January 2020. In its FIR, the CBI has alleged that Ms Kochhar had granted loans in crores of rupees to the Videocon Group, against the rules and policies. The agency has also put out scanner’s top on bankers within the case to know if they had a part in it.
Timeline ICICI Bank-Videocon loan case:
The probe started in 2016 when Arvind Gupta, an investor with both the firms, Videocon Group and ICICI Bank, raised concerns about alleged loan irregularities.
Mr Gupta, whose name became prominent in the case later, alleged that Ms Kochhar had approved a Rs 3,250 crore loan for Videocon Group in 2012 in exchange for a deal with NuPower Renewables, a company owned by the then ICICI Bank MD and CEO’s husband Mr Kochhar.
Mr Gupta wrote to authorities like RBI and even Prime Minister, but his complaint was given no attention at the time.
In March 2018, another whistle-blower complained that the delay in recognizing the impairment of several loan accounts between 2008 and 2016 was a deliberate action to save lots of on provisioning costs. The whistle-blower filed the complaint against the bank’s top management that quickly garnered the eye of the many agencies.
However, in the same month, the bank came out with a press release saying that they had full faith in Ms Kochhar. The statement was given after her alleged role in approving the loan to Videocon group was under scrutiny.
Later that month, CBI filed an indoor query and questioned Mr Kochhar’s husband and his brother, Rajiv Kochhar. Meanwhile, ICICI Bank continued to defend Ms Kochhar, who was facing many allegations.
In April 2018, the intense Fraud Investigation Office (SFIO) getting involved within the case and that they sought permission from the Ministry of Corporate Affairs for a search.
In May 2018, the Securities and Exchange Board of India (SEBI), shot a notice during which they asked Ms Kochhar and therefore the bank to show the proof of the bank’s handling Videocon group. They were asked to submit their responses by June 7.
In the wake of rising pressure, by May, ICICI also launched a search into the matter. On July 5, SEBI asked Ms Kochhar and bank again to reply to showcase notice by July 10 as they did not respond previously. On October 10, Ms Kochhar sought early retirement from her post and therefore, the bank approved with the promise that it might not affect the investigation in any manner.
On January 24, 2019, CBI registered a case against Mr and Ms Kochhar, along with Mr Dhoot over irregularities in sanctioned loans. January 30, marked the day when the BN Srikrishna panel found that Ms Kochhar had violated the bank’s code of conduct. As soon as the report was released, the bank took away all the bonuses paid to Ms Kochhar between April 2009 and March 2018.
In February 2019, she was given the termination letter by the bank to which Ms Kochhar filed a petition against the ICICI claiming her termination was illegal, untenable, and unsustainable in law.
In January 2020, the ED attached the assets worth quite Rs 78 crore belonging to Ms Kochhar family. The Bombay High Court, in March, dismissed the petition that challenged Kochhar’s termination. Earlier in June, CBI booked Mr Dhoot, for cheating millions from one among the leading lenders of the country.
Finally, on September 7, Mr Kochhar was arrested by ED after conducting a series of round of questioning. The agency had said they had found evidence against Mr Kochhar; however, they didn’t disclose the other information. Mr Kochhar was made to appear in front of the Prevention of Money Laundering Court (PMLA) for his remand hearing the same day.
The ED had filed the first charge sheet against Ms Kochar, her husband and Mr Dhoot on charges that reveal money laundering on November 4.
Although, they have all denied the allegations. The charges have been filed under the Prevention of Money Laundering Act (PMLA) and presented before a special court in Mumbai. The central probe agency had arrested Mr Kochhar in September after filing a criminal case of money laundering, based on an FIR registered by CBI.
Several probe agencies, including the CBI (Central Bureau of Investigation), ED, SFIO (Serious Fraud Investigation Office) and the tax department are conducting parallel investigations against Chanda Kochhar and her family.