ED initiates enquiry in ICICI-Videocon loan, asks Sebi for documents

The agency asked for details of investigation into the group's activities in the past few years

The Enforcement Directorate (ED) has started an enquiry into the Rs 32.50-billion loan sanctioned to the Videocon group and others by ICICI Bank, which was part of a consortium of lenders.

According to sources, the agency has written to the Securities and Exchange Board of India (Sebi), seeking information on the Videocon group. The ED asked for details of the investigation into the group’s activities in the past few years. 

The enforcement agency will also approach the Reserve Bank of India for details on disclosures by ICICI Bank about its dealings with Videocon.

“A discreet probe is on and we are in the process of gathering documents,” said an ED official. Sources say the ED was examining whether there was a misappropriation of funds, discrepancies in transactions, criminal breach of trust, and violation of anti-money laundering laws or the Foreign Exchange Management Act (FEMA). 

“It is premature to comment about the case and the breach of law at this point of time,” said the official cited above, and refused to give more details.

The issue concerning ICICI Bank-Videocon-NuPower Renewables came to light in 2016, when whistleblower and investor Arvind Gupta alleged a nexus between Deepak Kochhar, ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar’s husband, and Videocon group Chairman Venugopal Dhoot. 

Gupta wrote to the Prime Minister, the regulators and other authorities, seeking an inquiry into the dealings related to the three entities. However, none acted on his complaint. As part of the enquiry, the ED will record the statements of those who are under the scanner. The agency will then register the case, said another ED official. A month ago, the Central Bureau of Investigation (CBI) registered a preliminary enquiry (PE) into the matter, concerning Deepak Kochhar, executives of the Videocon group, and others. 

Sources said the PE was launched to ascertain the allegation that Dhoot gave money to a firm promoted by Deepak Kochhar and his two relatives six months after the Videocon group got Rs 32.50 billion as loan from ICICI Bank in 2012. 

The amount was part of the Rs 400-billion loan the Videocon group got from a consortium of 20 banks, led by State Bank of India. Last week, the board of directors of ICICI Bank defended Chanda Kochhar and denied allegations of favouritism while describing reports regarding credit disbursement to the Videocon group as “malicious and unfounded rumours”. The bank also said none of NuPower Renewables’ investors was a debtor to ICICI Bank.

Probe widens

• Central Bureau of Investigation files preliminary enquiry (PE) against Deepak Kochhar, officials of the Videocon group 
• PE to examine alleged irregularities in extending loan to the Videocon group by ICICI Bank
• ICICI Bank part of a consortium of banks 
• Enforcement Directorate initiated enquiry to examine financial irregularities 
• Sebi also looking into the violation of disclosures norms by Videocon group