ICICI Kochhar

What is fuss about ICICI Kochhar issue?

Chanda Kochhar, the managing director and chief executive officer of ICICI Bank, is at the center of a scandal that broke out after a whistle-blower alleged that the bank sanctioned loans to Videocon because its chairman Venugopal Dhoot had dealings with NuPower, a company founded by Kochhar’s husband, Deepak Kochhar. The Videocon loan later turned into a non-performing asset. Nearly 86 per cent of the loan remains unpaid.

The Income Tax Department has issued a notice to Deepak Kochhar, husband of ICICI Bank MD and CEO Chanda Kochhar, in connection with its tax evasion probe in the Videocon bank loan case. They said the notice has been issued to Deepak Kochhar under section 131 (power regarding discovery, production of evidence) of the I-T Act and he has been asked to furnish details of his personal finances, Income Tax Returns (ITRs) for the last few years and business transactions with the firm NuPower Renewables.

Media reports have suggested that Videocon’s promoter Venugopal Dhoot was one of the first investors in a renewables company promoted by Ms. Kochhar’s husband Deepak Kochhar called NuPower Renewables in 2008. He subsequently sold his stake but companies controlled by him or associates close to him maintained a relationship with NuPower Renewables till early 2013 when its control was finally transferred to a trust controlled by Deepak Kochhar.

In January 2009 just after buying a stake in NuPower, Dhoot transferred his shares to Deepak Kochhar for Rs 2.5 lakh and resigned as director. But the association with the Dhoot family did not end there. In March 2010, NuPower got a loan of Rs 64 crore by a company named Supreme Energy, entirely owned by Mr. Dhoot. At the end of the same month, Supreme Energy became a 94.99 percent shareholder in NuPower. The remaining shares were held by Mr. Kochhar. In November 2010, Dhoot transferred his entire stake in Supreme Energy to associate Mahesh Chandra Punglia. From September 2012 to April 2013, Punglia transferred his holding to Pinnacle Energy, a trust, where Deepak Kochhar was the managing trustee.

Few notices have been sent to the people associated with the firm. In a related development, Deepak Kochhar will be called for questioning soon.

ICICI has denied any wrongdoing on its part and that of Chanda Kochhar. In a statement the bank denied any conflict of interest and said that Videocon is not an investor in NuPower and that the renewables firm did not have a banking arrangement with ICICI.

The ICICI Bank board came out in support of Chanda Kochhar, saying it has full faith and confidence in her and described reports to Videocon group as “malicious and unfounded rumors”.

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