For the third day in a row, ICICI Bank CEO and MD, Chanda Kochhar’s, brother-in-law, Rajiv Kochhar were questioned by the Central Bureau of Investigation (CBI). The investigating agency has been questioning in connection with the Rs.3,250 crore loan given to Videocon Group in 2012. Incidentally, he was about to fly to a South East Asian country on Thursday last when he was detained by the investigating agency. The investigators were under pressure after allowing Vijay Mallya and Nirav Modi to flee the country after the businessmen’s failure to settle the defaulted loans.
Role in Restructuring of Loan
During the questioning, the Singapore-based Avista Advisory founder was asked to explain the role he played in getting the restructuring loan for the Videocon group. As much as 20 banks were involved in the consortium, and ICICI Bank was a part of the Rs.400 billion credit given to the consumer goods company. Rajiv appeared before the CBI for the third day at its Bandra Kurla Complex office in Mumbai. He was asked about the kind of help he extended especially in connection with the loan from ICICI Bank.
Doubts have increased after reports emerged that the loan amount was linked to a potential deal with Dhoot for NuPower Renewables, which is founded by Chanda’s husband, Deepak, and his brother Rajiv Kochhar. Following this, the Central government agency has registered a preliminary inquiry on the subject. As a result, Videocon founder, Venugopal Dhoot, and ICICI Bank CEO’s husband apart from unidentified persons came under the clouds of the agency as per Business Standard.
The first step for the CBI is the preliminary inquiry. This would help the agency to get more information on the allegations of favoritism. If the agency thinks that there is a prima facie material in the disbursal of the loan amount to Videocon group, then it would proceed in recording it as a regular case. In such case, the accused would have to face the trial in a court of law.
For its part, the government has reacted quickly to replace its nominee on the ICICI Bank board following the role in Videocon loan. Earlier, Amit Agarwal was on the board of the bank as a director. He has now been replaced by joint secretary of the Financial Services Department, Lok Ranjan, since Thursday. The government has been at the receiving end of letting Vijay Mallya and Nirav Modi flee the country and now wants to be more careful of its role.
Clean Chit to Chanda
However, it is not clear whether the Government has made a move after the emergence of the Videocon loan saga. That was because the department announced its decision only April 5. Aside from that, ICICI Bank board has also extended its full support to its CEO, Chanda Kochhar. She was also given a clean chit.
A whistleblower, Virendra Gupta, alleged that Rs.3,250 crore and Rs.660 crore loans were granted to Videocon Group in return for a ten percent foreign funding in NuPower Renewables. This was on the back of Dhoot and Deepak agreeing to set up a joint venture of an equal partner in 2008.