Avista helped ICICI Bank clients to recast loans for a commission: Reports

Avista Advisory group, a Singapore based company run by ICICI Bank MD & CEO, Chanda Kocchar’s relative helped clients of ICICI Bank to restructure its loans for a commission, media reports said on Tuesday.

Avista is set up by Rajiv Kochhar, brother of Chanda Kochhar’s husband Deepak Kochhar. Deepak Kochhar is facing a Central Bureau of Investigation (CBI) preliminary enquiry on whether ICICI Bank gave loans to consumer durable firm, Videocon in lieu of investments by Videocon in a personal company owned by Deepak Kochhar. Kocchar and ICICI Bank’s board have denied any wrongdoing.

According to the Indian Express, Avista Advisory got the mandate to restructure foreign currency-denominated debt deals worth over $1.7 billion of seven companies over the last six years. All these companies were borrowers of ICICI Bank at the same time and in at least one of these deals, ICICI Bank was the lead bank of the lenders, the Express report said.

On Monday, Subramanian Swamy, a BJP Member of Parliament,  tweeted that the CBI should probe in ICICI loan scam Avista Advisory which got 5 per cent on every big loan for certification. Avista is owned by a relative of Kochhar, he said.  

Avista, as per an industry source, had expertise in restructuring foreign currency loans in association with Houlihan Lokey, a US-based firm.

Rajiv Kochhar has denied any business dealing with ICICI Bank.  “There is no conflict. The entire process of selection of “Debtor Advisor” was competitive. We were chosen as a “Debtor Advisor” in the restructuring of the FCCBs of Jaiprakash Associates Limited, Jaiprakash Power Ventures Limited and GTL Infrastructure Limited. In these restructuring transactions, the “Debtor” of the FCCBs were the respective Companies and the “Creditor” were the respective Foreign Currency Convertible Bondholders who are “Foreign Investors” in these FCCBs." 

Responding to a questionnaire from The Indian Express, an ICICI Bank’s spokesperson said: “We would like to categorically state that ICICI Bank has never engaged Avista Advisory Group for any services at all. Your mail itself indicates that the said entity claims to be an advisor to various corporates. You may refer any query regarding Avista Advisory Group to the firm and its clients.”

The spokesperson added: “Kindly also note that the brother of a husband does not fall within the definition of a “relative” under the Companies Act, 1956 or 2013 or the Rules thereunder. Hence there is no requirement of any disclosure of such a relationship by any official of the Bank…In view of all the above, your insinuation of conflict of interest is totally baseless and malafide in intent.”

Avista advised the companies in the negotiation with these foreign investors in order to restructure the FCCBs. Since the FCCB restructuring transaction did not involve any negotiations between the Companies and the “Domestic Lenders/ICICI Bank”, there is no conflict of interest of whatsoever nature, Avista said. Barring GTL Infrastructure, all the other companies are an NPA in ICICI Bank's books.

In an interview to Livemint, Kocchar said the allegations have caused serious damage to his reputation but "our clients have told them not to pay attention to these". “Let this just pass and you do not even need to respond to such a thing. Our clients know us, they are not concerned about it at all,” the Mint quoted him as saying.  

As per Avista's website, the company has strong stressed asset restructuring advisory practice and successful NPL resolution platform in South East Asia & India and access to wide spectrum of pools of institutional and private capital. The company was also in the process of setting up our stressed asset and special situation (SASS) investment management & investment advisory platform.