An appellate tribunal has upheld a 2020 Enforcement Directorate (ED) order against former ICICI Bank CEO and MD Chanda Kochhar and her husband for giving loan to the Videocon group, observing a “prima facie” case of money laundering that involved a flat in Mumbai’s Churchgate and a Rs 64 crore bribe, which was used to acquire wind power farms.
In its July 3 order, the tribunal said it found “substance” in the ED’s allegation of a quid pro quo arrangement linked to a Rs 300 crore loan sanctioned by ICICI Bank to Videocon Group of Companies in August 2009, just three months after Kochhar became its chief executive. The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) also said that both the transactions involving the property and the Rs 64 crore bribe amounted to “proceeds of crime” and hence, ordered the attachment of the property, going against the earlier ruling of the Adjudicating Authority.
Back in 2020, the ED had provisionally attached Flat No. 45 at CCI Chambers in Churchgate, the wind assets, and Rs 10.5 lakh in cash under the Prevention of Money Laundering Act (PMLA). However, the Adjudicating Authority had refused to confirm the attachment in November that year, prompting the ED’s appeal to the tribunal – which has now ruled in its favour.
The Rs 300 crore loan was sanctioned by ICICI Bank to Videocon International Electronics Ltd (VIEL), part of the Videocon Group. The loan was disbursed on September 8, 2009, and on the following day, VIEL transferred an amount of Rs 64 crore to NuPower Renewables Pvt Ltd (NRPL), a firm linked to Deepak Kochhar, Chanda Kochhar’s husband.
“The amount of Rs.64 crores came to M/s NRPL was used for the benefit of Mr. Deepak Kochhar… (It) was utilized towards purchase of Wind Farm projects of 33.15 MW capacity while Mr. Deepak Kochhar was the Managing Director of the Company,” the appellate authority said in its order.
The tribunal rejected Chanda Kochhar’s claim that the loan to Videocon was sanctioned by a committee, not her, and thus she had no link to the Rs 64 crore transfer from the group to a company managed by her husband.
While the Kochhars have argued that the Churchgate flat has belonged to them since 1995, the appellate tribunal order said “facts on record gives a different picture”. While Deepak Kochhar and his brother initially purchased the flat, it was handed over to a Videocon Group entity in April 2009 to settle a loan, as it had been mortgaged. In 2016, the flat was transferred to a family trust of Deepak Kochhar for a consideration of Rs 11 lakh, it said.
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“When the value of the Flat was Rs 5.25 Crores in the year 1995, the appreciated value must be many times in the year 2016. The Videocon Group of Industries alleged to have passed on benefit to the respondents and since the respondents have failed to justify the transaction at the meagre amount, the appellants have rightly taken it to be nothing but the proceeds of crime and accordingly attached the property,” the July 3 order said.
The order also noted that the Kochhars had been associated with Videocon Group’s promoter V N Dhoot since 1994-95. It also highlights Dhoot’s links with multiple entities under the scanner, including NRPL, which he incorporated with Deepak Kochhar in 2008.
“It may be true that the issue will be determined by the Trial Court but we find a prima facie case against the respondents for commission of the offence of money laundering and, therefore, the Provisional Attachment Order is justified,” the July 3 order said.
The ICICI Bank and Chanda Kochhar came under regulatory scrutiny after The Indian Express first reported on March 29, 2018 that Videocon Group promoter Venugopal Dhoot provided crores of rupees to a firm he had set up with her spouse, Deepak Kochhar, and two relatives, six months after the Videocon Group got Rs 3,250 crore as loan from ICICI Bank in 2012. In December 2017, the CBI had registered a preliminary enquiry into the sanctioning of the loan.
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In January 2019, the CBI booked the Kochhars, Dhoot and others, and said Chanda Kochhar had “dishonestly” granted loans to the tune of hundreds of crores of rupees to the Videocon Group “in contravention of rules and policy… by abusing her official position”. The ED had then registered a case based on the January 2019 CBI FIR.
