Name:- Nikhil Ravindra Mhatre

Roll No.:- 24
Subject:- Banking and Financial Services Institutions
Case Study on
ICICI BANK – VIDEOCON BRIBERY CASE
Introduction
The ICICI Bank-Videocon case is about allegations of a quid-pro-quo deal between the
Kochhars and the Videocon group. The head of the ICICI bank was Kochhar’s. The case rotates
around a loan given by ICICI Bank to the Videocon group as a part of a State Bank of India (SBI)
led consortium in 2012 and the change of ownership in a firm called NuPower Renewables
Pvt Ltd, which was floated as an equivalent joint venture between Chanda Kochhar’s husband
Deepak Kochhar and Videocon’s Venugopal Dhoot.

Background story of bank fraud

According to the CBI, several companies of Videocon Group promoted by Dhoot have been
sanctioned loans to the tune of Rs 3,250 crore by ICICI Bank in violation of the RBI guidelines,
Banking Regulation Act, and credit policy of the bank.
As part of the quid pro quo, Dhoot allegedly invested Rs 64 crore in Nupower Renewables, a
company owned by Deepak Kochhar, through a circuitous route between 2010 and 2012.
Chanda Kochhar was a member of the committee that cleared the loan to Dhoot, the CBI has
alleged. According to the agency, Chanda Kochhar abused her official position to sanction the
loan to Dhoot.
Brief of bank fraud

The root of the controversy can be traced back to 2010 when Chanda Kochar was the CEO of
the bank. Kochhar, along with her husband and Videocon Group promoter Venugopal Dhoot
have been arrested by the CBI. As mentioned by the CBI, credit facilities of around Rs 3,250
crore were sanctioned to Videocon group companies while Kochhar was the CEO, but that
sanctioning of such a lump sum amount was a violation of RBI rules and the ICICI Bank’s credit
policy.

CBI has alleged that six loans were disbursed by ICICI Bank to Videocon Group and its
associated firms between 2009 and 2011 during Kochhar’s tenure. She was a part of the
committees that sanctioned the two major loans, worth Rs 300 crore and Rs 750 crore. The
matter further got complicated as the CBI alleged that the Videocon group transferred a part
of the sanctioned loans to Deepak Kocchar’s company.

As per CBI's allegations, Videocon’s Dhoot had invested Rs 64 crore in Deepak Kochhar’s
Nupower Renewables and allegedly made this investment through a company Supreme
Energy Pvt Ltd (SEPL), which he transferred to Deepak Kochhar-managed Pinnacle Energy
Trust. The transfers happened from 2010 to 2012. As per the CBI's information, the transfer
of Rs 64 crore to Nupower happened a day after the loan worth Rs 300 crore was disbursed
in September 2009.

Although ICICI Bank previously claimed that the loan was disbursed as per the guidelines of
the bank and supported Kochhar, but she had to resign in 2018 when the case blew up. It was
even alleged that most of these loans turned into non-performing assets.

Kochhar, 59, quit the position of CEO and MD of ICICI Bank in October 2018 after the
allegations. During her retirement, Kochhar had 6,90,000 shares of the bank through ESOPs.

Timeline of events that contributed of fraud

• October 2016 – After an investor informant Arvind Gupta, an investor in both ICICI
Bank and Videocon Group, raised questions via a blog, the topic of suspected loan
irregularities comes to light. Gupta affirms that Chanda Kochhar influenced the
Venugopal Dhoot-led Videocon group’s Rs 3,250-crore loan in 2012 in exchange for a
contract with NuPower Renewables and Supreme Energy, a renewable energy
 business owned by her husband Deepak Kochhar. Gupta keeps in touch with the Prime
Minister, the RBI Governor and a few different authorities requesting a probe. His
complaint, however, accumulates no attention.
• March 2018 –The case again comes in the spotlight
when another anonymous informant grumbles
against the bank and its top administration, including
Kochhar, alleging an intentional delay in recognising
hindrance in 31 loan accounts somewhere in the range
of 2008 and 2016 to save money on provisioning costs.
These charges led to probes by numerous agencies,
including the Central Bureau of Investigation (CBI),
enforcement directorate (ED) and Serious Fraud
Investigation Office (SFIO), and furthermore
questioning of Kochhar relatives.
• March 28, 2018 – The bank expresses that it has
reviewed internal procedures for credit approval and
‘found them to be strong’. The statement points out
that the decision to give loan to Videocon Group was
taken at the consortium level. Despite the fact that
Kochhar was a part of the loaning advisory group that
approved the loan, she didn’t have any personal stake
in it. The bank’s board additionally communicates full confidence in Kochhar, denying
any bad behaviour on her part and precluding any ‘irreconcilable situation’
• March 31, 2018 – An initial enquiry is filed by the CBI. Later also, the investigating
agency questioned Deepak Kochhar and his sibling Rajiv Kochhar.
• April 3, 2018 – Coming to the defence of its CEO Chanda Kochhar, ICICI Bank Chairman
M K Sharma said the board has full trust in her and precludes any quid pro quo as
alleged in respect of the loan given to Videocon group.
• “The board has arrived at the conclusion that there is no doubt of any quid pro quo or
compensation/nepotism/conflict of interest as is being asserted in different rumours,”
he tells reporters.
• April 4, 2018 – The Serious Fraud Investigation Office (SFIO) is seeking the nod from
the Ministry of Corporate Affairs to check the Rs 3,250 crore loan from ICICI Bank to
the Videocon group in 2012.
• May 23, 2018 – The Securities and Exchange Board of India (SEBI) shall inform ICICI
Bank CEO and MD Chanda Kochhar of the lender’s dealings with the Videocon Group
and NuPower Renewables, an organization supported by her friend Deepak Kochhar.
The market regulator asked Kochhar and the bank to present their responses till June
7 according to a 12-page show-cause notice it served to ICICI Bank and Kochhar on
May 23.
• May 30, 2018 – An autonomous probe starts at the ICICI Bank board.
• June 2018 – The bank appoints retired Supreme Court judge BN Srikrishna to head the
independent panel set up by the board of ICICI Bank.
• June 8, 2018 – ICICI Bank and Chanda Kochhar are looking for more time to respond
to the market regulator SEBI ‘s show-cause notice.
• July 5, 2018 – Kochhar is asked by SEBI to answer to the show cause notice over alleged
infringement 0f listing disclosure standards by July 10. The deadline of 7th July had
been missed by Kochhar and the bank and looked for more opportunity to respond to
the notification because of the absence of documentary proof that helped the claims.
• October 4, 2018 – The ICICI Bank board acknowledges and accepts Chanda Kochhar’s
request to seek early retirement. The bank says that the enquiry established by the
board will stay unaffected and certain advantages will be dependent upon the result
of the enquiry.
• January 24, 2019 – The CBI files an FIR against Chanda Kochhar, her husband Deepak
Kochhar, and Videocon group MD Venugopal Dhoot over alleged loan defaults granted
to the company by the bank in 2012.
• January 30, 2019 – In the Videocon loan case, a panel headed by Justice BN Srikrishna
found that Kochhar infringed the code of conduct of the bank. After the survey, the
board of the bank says that it will view her separation as a ”termination for cause’
under their internal policies.
Parties who were responsible in fraud
• Former MD and CEO of ICICI bank,
• Chanda Kochhar
• Chanda Kochhar’s husband
• Deepak Kochhar
• Videocon Group Chairman Venugopal Dhoot