Controversial exit of Chanda Kochhar explained
Chanda Kochhar, a Padma Bhushan recipient, has recently faced allegations of misconduct and corruption. She is said to have been involved in sanctioning of loan of 3250 crores to Videocon group whose MD is close to her husband, Deepak Kochhar.
Chanda hails from Rajastan. She pursued BA and then did cost accounting and masters in managements at Bajaj institute where she topped her batch. She joined ICICI ( Industrial Credit and Investment Corporation of India) as a management trainee in 1984 and worked her way up to GM by 1999.
ICICI started off only for commercial sector but ventured into retail and in 5 years became the largest retail financier (for individual customers; savings,personal loans etc ) with Chanda Kochhar as its Executive Director. By 2006, she was made deputy MD for corporate and retail and 3 years later, MD and CEO of ICICI.
Things got ugly in 2016 when whistle blower Arvind Gupta spoke about the Videocon loan sanctioned by an consortium of 20 banks for 40,000 crores lead by SBI in which Chanda was part of the board committee. ICICI had sanctioned 3250 crores of which 86% has not been repaid yet. Gupta accused Chanda of corporate misconduct as Videocon MD, Venugopal Dhoot and her husband, Deepak Kochhar have a joint venture together — Nupower.
ICICI bank had granted 3250 crores to Videocon in 2012 , two years after which Dhoot had loaned 64 crores to NuPower Renewables which was owned solely by Deepak 6 months after the loan was sanctioned. This transfer of company to Deepak’s trust was made at a mere 9 lakhs and shares (50%) at just 2.5 lakhs. This is what raised eyebrows regarding the loan sanctioned by the board in which Chanda was also present. It is considered as a quid pro quo for the loan from the bank which later became an NPA in 2017.
More allegations are listed below
- Avista Advisory Group
ICICI bank borrows are said to have hired services from Avista Group run by Chanda’s brother-in-law for restructuring of dept for Videocon, GTL Infrastructure and Suzlon. However brother of a husband doesn't fall within definition of relative and thus need not be disclosed.
2. Properties
The family residence in Mumbai was bought during the complex transaction with Videocon through Credential Finance which was set up by Deepak and his brother in 1990s and it had intricate relations with Videocon group. The prices are to be examined. If found to be lower than market price, it is clearly a quid pro quo.
3. Essar Group
NuPower received investments of 453 crores from Essar Group routed through Matix group and Firstland Holdings Ltd both based in Mauritius owned by son-in-law of Essar Group VC Ravi Ruia for which ICICI is the key lender. Both the projects are now bankrupt.
4. ICICI bank building
Radhika apartments, a 13 storey building which was earlier the staff quarters for ICICI in Mumbai was sold to Videocon Industries at a much lower price than existing market rate proving it to be a trade-off.
All these allegations has lead to Chanda Kochhar resigning from her position as MD and CEO.
