Explained: What Led To Former ICICI Bank CEO Chanda Kochhar's Arrest
CBI accused Chanda Kochhar of sanctioning loans to the Videocon Group in return for investment in her husband Deepak's company.
Days after being remanded to CBI custody, ex-ICICI head Chanda Kocchar and her husband Deepak sought to quash the case against them. However, the Bombay High Court's vacation bench was disinclined to hear the plea observing there was no pressing urgency for a hearing.
The Kocchars plea may be heard on January 2 once the court reopens after winter break.
The Kocchars arrest comes three years after the Central Bureau of Investigation (CBI) filed an FIR accusing the duo of cheating and irregularities pertaining to a 2012 loan to the Videocon Group. CBI on December 26 arrested Videocon promoter Venugopal Dhoot.
A special court in Mumbai has remanded the three to CBI custody till December 28.
BOOM recaps the case here.
What is the case against Chanda Kocchar?
Simply put, the CBI alleged that while Chanda Kocchar was MD and CEO of ICICI Bank, she sanctioned credit facilities amounting to Rs 3250 crores to the Videocon group. These loans were sanctioned in violation of the Banking Regulation Act, RBI Guidelines, and the banks' credit policies, the CBI's FIR said.
In return, Venugopal Dhoot, through his company Supreme Energy Pvt Ltd, invested Rs 64 crores in NuPower Renewables Ltd which was headed by Kocchar's husband Deepak. According to the CBI, Dhoot even transferred SEPL to Pinnacle Energy Trust which Deepak co-managed along with Saurabh Dhoot.
Loans sanctioned to the Videocon group turned into a Non-Performing Asset (NPA) and were deemed as a 'bank fraud'.
What does ICICI Bank say?
Chanda Kochhar's rise with the ICICI Bank was meteoric and paralleled the bank's success. A Padma Bhushan awardee, Kocchar revolutionised retail banking and become an icon. Chanda achieved celebrity status and was featured in Forbes International's list of "The World's 100 Most Powerful Women" for seven consecutive years. In 2015, TIME magazine also named her "100 Most Influential People" in the world.
The bank initially supported Chanda and denied any wrongdoing on her part when an unnamed whistleblower came forward in March 2018 alleging irregularities. However, months later when the allegations kept mounting, the bank was forced to reverse its stand and initiate an internal probe.
In June 2018, the bank picked former Supreme Court judge BN Srikrishna to lead an independent probe while Chanda went on an indefinite leave pending the investigation. With six months left till her term expired, the bank in October 2018 accepted Chanda's request for early release.
In January 2019, the Justice Srikrishna panel indicted Chanda for "violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties". In its statement, the ICICI Bank said a new inquiry in Chanda's conduct between April 2009 and March 2018 found she violated bank policies.
The board said the report further found Chanda failed to meet bank requirements on annual disclosures and her actions rendered the bank's processes ineffective.
In July 2021 while granting sanction to prosecute Chanda, the ICICI Bank told CBI that "the loans under probe were extinguished and no wrongful loss has been caused to the bank", senior advocate Amit Desai told a special CBI court on Saturday.
Arguing against custody, Desai—he is representing the Kochhars—was reading a letter the bank wrote to the central probe agency to support his case. "…due process was followed while granting loans", the letter said but the bank was granting sanction "considering the allegations of bribery and corruption…".
Timeline of events:
Oct 2016: ICICI Bank and Videocon Group investor Arvind Gupta alleged loan irregularities. The Reserve Bank of India probed these allegations but found them meaningless.
March 2018: An unnamed whistleblower filed a complaint against ICICI Bank alleging deliberate delays in recognising a loss in 31 loan accounts to save on provisioning costs. At this point, the CBI initiated an internal inquiry and questioned Deepak and his brother Rajiv Kochhar.
April 2018: The board at ICICI Bank supported Chanda and denied her involvement in any misconduct. However, a day later, the Serious Fraud Investigation Office (SFIO) sought approval from the Ministry of Corporate Affairs (MCA) to probe the 2012 ICICI Bank loans sanctioned to the Videocon group.
May 2018: SEBI issued notice to Chanda Kocchar on the dealings between the Videocon Group and NuPower Renewables. A week later, ICICI Bank reversed its stand and initiated an independent probe.
June 2018: ICICI Bank picked ex-Supreme Court judge BN Srikrishna to head the probe even as it sent Chanda on leave pending an investigation.
October 2018: Chanda pre-maturely quit as the bank's head honcho with six months left to her tenure.
January 2019: The CBI registered an FIR against Chanda, her husband Deepak and Videocon group promoter Venugopal Dhoot.
The Justice Srikrishna panel found Chanda violated the bank's code of conduct in the Videocon loan case. The ICICI Bank issued a statement saying it would now treat Chanda's resignation as 'termination for cause'.
February 2019: The CBI filed a money laundering case against Chanda and issued a lookout notice against her.
July 2019: ICICI Bank granted sanction to prosecute Chanda while adding that "the loans under probe were extinguished and no wrongful loss has been caused to the bank".
January 2020: The Enforcement Directorate (ED) provisionally attached Kochhar's assets amounting to Rs. 78 crores.
March 2020: The Bombay High Court upheld Chanda's termination as CEO.
September 2020: ED arrested Deepak Kocchar in the money laundering case. Six months later, he was granted bail on a personal bond of Rs 3 lakhs.
November 2020: ED filed its chargesheet in this case.
December 23, 2022: CBI arrested Chanda and Deepak Kochhar. A special court in Mumbai remanded the duo in CBI custody till December 28.
December 24, 2022: A special court in Mumbai remanded the duo to CBI custody till December 28.
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