CBI FIR Against Kochhar Misses RBI Probe’s Findings: No Quid-Pro-Quo Found; ICICI Share In Loans-Turned NPAs Mere 6%

The Central Bureau of Investigation’s (CBI) first information report (FIR) on Thursday (24 January) against ICICI bank’s former managing director and CEO Chanda Kochhar seems to have missed an important point made by Reserve Bank of India (RBI) as early as 2016 in its initial probe into the allegations of misconduct.

The central bank had noted that the ICICI bank was itself a part of the consortium of 20 banks who sanctioned loans to Videocon Group, and the bank’s share in the consortium’s total loans which were declared non-performing assets in 2017, was less than 6 per cent, reports The Hindu.

The FIR filed by CBI, levelling accusations of criminal conspiracy and cheating among others, garnered criticism, with Union Minister Arun Jaitley calling it a case of ‘investigative adventurism’.

ICICI Bank’s share in the consortium’s total loans extended to Videocon was only six per cent, and in fact, under Chanda Kochhar’s leadership, it was able to reduce its outstanding exposure to the group from ₹3,350 crore in December 2011 to ₹2,850 crore by March 2018.

Apart from Chanda Kochhar, the FIR names her husband Deepak Kochhar as well as Videocon Group’s managing director Venugopal Dhoot. The CBI alleges that Ms Kocchar used her position and clout to get loans approved for Videocon Group, and in return received illegal and undue benefits via her husband.

The whole issue came to light when a ‘whistleblower’ Arvind Gupta communicated a complaint to the Prime Minister’s Office in 2016; the complaint was then forwarded to the RBI, which reached a sceptical conclusion after a probe, stating, “As reported in our scrutiny note, the loan sanctioned by ICICI Bank was a part of the debt recast programme of ₹20,195 crore by a consortium of banks led by SBI where ICICI’s share was ₹1,750 crore. The “quid pro quo” could not be established as ICICI Bank had to take a share like other banks in the consortium....”

Also read: CBI’s Move Against Chanda Kochhar Will Lead To Further Chill In Credit Market

The CBI’s quid pro quo contention mainly rests on the assertion that a firm co-founded by Deepak Kochhar along with Dhoot called Nupower Renewables Private Limited (NRPL) had received a capital infusion loan worth Rs 64 crore from a firm belonging to the latter after control over the firm had been handed over to Deepak.

However, RBI deemed the transfer of ownership of NRPL by Videocon as ‘an unrelated event’ outside its regulatory purview. The central bank had told the Finance Ministry that appropriate authority to probe this aspect would be Securities Exchange Board of India (SEBI), as well as the Ministry of Corporate Affairs (MCA). It is not clear from the CBI’s FIR if SEBI and MCA had carried out an examination of these transactions.