Srikrishna panel seeks replies from Chanda Kochhar in Videocon loan case

Committee expected to submit ICICI Bank-Videocon loan case probe report by third week of January

The ICICI Bank-appointed committee set up under retired Supreme Court judge B N Srikrishna is reaching closure in its probe on allegations of code of conduct and conflict of interest by the bank’s former managing director (MD) and chief executive officer Chanda Kochhar in the Rs 32.5-billion ICICI Bank-Videocon loan case. 

Based on the probe findings so far in the matter, the committee has sought replies from Kochhar, ICICI Bank, and other involved entities. The committee is expected to complete the investigations and submit the report by the third week of January.

According to sources, the Srikrishna panel has sent queries to all the involved entities, seeking specific details around the loan sanction to Videocon group. “The queries to the parties also cover missing links, which are essential to understand the whole genesis,” said the person. The panel is believed to have examined each financial transaction between the Kochhar family and Videocon group, and the suspected trail of properties and assets that the Kochhar family acquired since she become the bank’s MD. The panel has also taken account of the banking relationship with Videocon’s other corporate houses, and concessions, if any, were provided to them. 

Sources say that the Srikrishna panel has also thoroughly studied the role of the credit committee, which sanctioned the loan to Videocon group, given that large exposures to corporates like Videocon were approved by the credit committee of the board.

According to the records, the credit committee of ICICI Bank in 2012 had sanctioned its share of facilities to the Videocon group. It was a 12-member committee headed by then chairman K V Kamath. Besides, ICICI Bank, which gave a loan of Rs 32.5 billion as part of the 20-bank consortium which approved total loans of Rs 400 billion. 

“The investigation into several allegations enters final stage. I am expecting the outcome by the third week of January,” Justice Srikrishna told Business Standard.

The panel has taken all aspects into consideration along with the replies it has received so far in the matter. Sources also said that if required, the Srikrishna panel would ask various parties to make a personal appearance after their written submissions. 

Another person close to the development said that the probe report will be comprehensive, covering all digital records such as emails from 2009 to date. The report will include the genesis of business dealings that warranted the probe. 

The panel has considered the forensic audit, emails, and personnel financials to come to a logical conclusion. Further, it has reviewed the Reserve Bank of India’s (RBI’s) 2016 detailed scrutiny in the ICICI Bank’s dealing with Videocon. 

The RBI in its report had looked into the issue, but said no quid pro quo could be established.

Sources said that the Srikrishna panel had probed investments in NuPower Renewables independently. The panel has also gone through the investigative agencies’ enquiry into this alleged nexus. 

The Srikrishna Committee report would be critical for Kochhar and ICICI Bank, who are already facing a probe by market regulator Securities and Exchange Board of India (Sebi) and the Central Bureau of Investigation (CBI). Sebi has issued show cause notice to the bank and Kochhar and initiated adjudication proceeding against them. In June 2018, the ICICI Bank board had appointed Srikrishna to conduct an independent probe after it received whistle-blower complaints that Kochhar had violated the bank’s code of conduct and there were quid pro quo dealings in the loan given to Videocon group, which had, in turn, financed NuPower Renewables.  

Kochhar opted for an early retirement amid the probe and had clarified to the market regulator that she was only part of the credit committee without any veto power. She also claimed to have attended only eight out of the 30 meetings held for the Videocon group ever since she took over as the bank’s MD. ICICI Bank declined comment on Business Standard’s e-mail, while queries to Kochhar did not elicit any response.  

THE ISSUES SO FAR

• ICICI Bank orders independent enquiry to probe allegations on Chanda Kochhar in June 
• Former SC judge Srikrishna appointed to probe the Videocon loan case
• Panel reviews forensic audit of transactions between Kochhars and Videocon group
• Examines digital records, emails related to Videocon loan case from 2009 to date
• Studies the role of credit committee, which sanctioned the loan to Videocon group
• Considers findings of investigative agencies and RBI of possible nexus in business dealings
• Seeks specific details from all involved persons and entities
• Report to be submitted by third week of January