A Rs 64-crore loan was offered by a firm owned in large part by Videocon’s Venugopal Dhoot to a firm co-owned by Dhoot and Deepak Kochhar, ICICI CEO and MD Chanda Kochhar’s husband, following which the ownership of Dhoot’s entity – which accorded the loan – was transferred to a trust headed by Kochhar for Rs 9 lakh, a recent investigation by The Indian Express revealed.
Express alleges that the transactions happened six months after the Videocon Group got a loan of Rs 3,250 crore from ICICI Bank and that nearly 86 percent of that loan (Rs 2,810 crore) remains unpaid with Videocon account being declared a non-performing asset in 2017.
The daily wrote to ICICI Bank, and Venugopal Dhoot, with a number of queries about this transaction, including the question of whether this constituted a “conflict of interest.”
ICICI Bank and the other entities’ responses to the questionnaire added more hints in the smoke.
But First, Some Context
December 2008: Venugopal Dhoot of the Videocon Group and Deepak Kochhar, husband of Chanda Kochhar, MD and CEO of ICICI Bank set up NuPower Renewables Private Limited (NRPL) in 2008.
Dhoot was appointed Director of NRPL.
Dhoot and members of his family held 50 percent of the shares of NRPL. Deepak Kochhar and Pacific Capital (owned by Deepak’s father and Chanda Kochhar’s brother-in-law) jointly held the other 50 percent of NRPL’s shares, the Express report adds.
January 2009: Dhoot resigned as Director of NuPower and transferred his 24,999 shares to Deepak Kochhar for Rs 2.5 lakh.
March 2010: Dhoot, through a company owned 99.9 percent by him, Supreme Energy Private Limited, gave a loan of Rs 64 crore to NRPL.
After a series of transfers from Venugopal Dhoot to Deepak Kochhar, and from Pacific Capital, owned by Deepak Kochhar’s relatives, to Supreme Energy Private Limited, Supreme Energy came to own 94.99 percent of NuPower.
At this point, Supreme Energy (which was 99.9 percent owned by Venugopal Dhoot), also owned 94.99 percent of NuPower.
November 2010: Dhoot then transferred the 99.9 percent holding he had in Supreme Energy to an associate, Mahesh Chand Punglia.
September 2012-April 2013: Over this period, Punglia transferred his holding in Supreme Energy to a trust, Pinnacle Energy. Deepak Kochhar was the managing trustee of Pinnacle Energy. The transfer was done at a value of Rs 9 lakh.
In effect, Pinnacle energy, where Deepak Kochhar was a managing trustee, absorbed Supreme Energy, which gave the initial loan of Rs 64 crore to NuPower Renewables Private Limited, which was at the time owned in large part by Deepak Kochhar.
In a nutshell, a firm owned by Dhoot gave a Rs 64-crore loan to a firm owned in large part by Deepak Kochhar. The firm owned by Dhoot, was then, gradually subsumed by Pinnacle Energy Private Limited, a trust managed by Deepak Kochhar.
Here’s what ICICI Bank, Venugopal Dhoot, and NuPower Renewables said in their reply to questions about this from The Indian Express.
Your Questions Do Not Pertain to Us: ICICI Bank
While the first part of the response by ICICI denied allegations of a conflict of interest, the second part records responses to questions about Pinnacle Energy and NPRL.
Your other questions do not pertain to us and our clients, but given the insinuations made in your mail, I would also like to state that none of the investors of NuPower Renewables are borrowers of ICICI Bank.
You Are Wrong: NuPower Renewables
NuPower Renewables had this to say about ICICI’s lendings to companies owned by Dhoot, mentioned in the first part of the letter.
At the outset we would like to say that we have no concern or connection with ICICI Bank’s lending to companies owned by Mr Venugopal Dhoot. The facts stated in your email are not correct.NuPower Renewables Private Limited
Venugopal Stopped Being Involved With NPRL & Supreme Energy in 2009: NPRL
The response from NuPower Renewables states that Venugopal resigned as director of NPRL in January 2009, and transferred all the shares he held in NPRL and Supreme Energy Private Limited to “a third party” on account of being “busy with other engagements.”
Mr V N Dhoot resigned from the board of directors of NuPower Renewables and Supreme Energy Pvt Ltd on 15 January, 2009, and on the same day he sold at par his 24,996 shares of NuPower Renewables and also sold to a third party his 9,990 shares of Supreme Energy at par on account of being busy with other engagements. Hence, he gave up control of Supreme Energy and completely delinked himself from both the companies’ w.e.f. 15 January, 2009. Hence Mr Dhoot has no concern or interest with Supreme Energy beyond 15 January, 2009.NPRL’s reply
Venugopal Dhoot’s reply, parroted the same statement.
On 15 January 2009, I resigned as the Director of NuPower Renewables and Supreme Energy Private Ltd and sold at par the 24,996 shares of NuPower and 9,990 shares of Supreme Energy held by me, thereby relinquishing my right, title and interests in the said shares, giving up control and management of Supreme Energy and completely disassociating myself from both the Companies all on the same day, as I got too busy with my other larger business like oil & gas, telecommunication, etc.Venugopal Dhoot, in his reply to The Indian Express
But Wait!
The Indian Express report, however, states that the RoC filings of Supreme Energy Pvt Ltd lists Venugopal Dhoot as the owner till October 2010. It adds that Dhoot only transferred his shares in Supreme Energy to Mahesh Chand Punglia in November 2010, one year and 10 months after the date he claimed to have done so.
We Have Multiple Checks in Place: ICICI Bank
The response by ICICI Bank, explains the process it follows for loan approvals, in some detail, highlighting that larger loans, or loans given to borrowers with a lower credit score, are based on recommendations by an external credit risk management group.
Further, the reply adds, that the Credit Committee of the Board must approve larger loans, and that the board of the bank oversees their function. The reply adds that:
...it can be concluded that there are adequate checks and balances in loan appraisal, rating and approval processes within the bank, both from the control as well as from a governance perspective. Given this architecture, no individual employee, whatever may be his or her position, has the ability to influence the credit decision at the Bank.ICICI, in response to The Indian Express
(With inputs from The Indian Express)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)