Stock markets regulator Securities and Exchange Board of India (SebI) issued a notice to ICICI Bank, and its managing director and CEO Chanda Kochhar in connection with the Rs. 3,250-crore Videocon loan case, the bank said on Friday. The notice, which ICICI Bank received on Thursday, had sought responses from the second largest private lender for not adhering to the stock market disclosure requirements in connection with the ongoing controversy over alleged conflict of interest involving Chanda Kochhar in the case. Media reports had claimed in March that Chanda Kochhar had approved a loan in 2012 to Venugopal Dhoot's Videocon Group in return for a favour received by NuPower Renewables, an entity in which Mr. Deepak Kochhar has alleged economic interests.
Sebi sent the notice in the wake of responses sent by the bank to several queries in the recent past relating to the Videocon case. The markets regulator felt that adequate disclosures were not made by ICICI Bank to the stock markets relating to the case.
Thus, Sebi issued the notice for alleged violations of certain provisions of the Listing Obligations and Disclosure requirements (LODR). The notice has been sent under the Rule 4(1) of SCR (Procedure for Holding Inquiry and imposing penalties by Adjudicating Officer) Rules 2005, ICICI Bank said. As per the securities market regulator's LODR regulations, all listed entities are mandated to immediately disclose relevant and important information to stock exchanges.
"Appropriate responses would be submitted to Sebi by the Bank in accordance with regulation," ICICI Bank said in a regulatory filing.
In 2008, Mr Dhoot set up a company with Deepak Kochhar and two relatives. Mr Dhoot later allegedly gave Rs. 64 crore loan to NuPower Renewables through an entity owned by him. Later, he transferred the ownership of this entity to a trust headed by Deepak Kochhar for a meagre amount of just Rs. 9 lakh, an Indian Express investigation had disclosed.
The transfer of the company to Deepak Kochhar happened six months after Videocon Group got a loan of Rs. 3,250 crore from ICICI Bank.
ICICI Bank's management has denied the allegations on the grounds that it was not only ICICI Bank but a consortium of 20 banks and financial institutions that sanctioned in 2012 credit facilities to the Videocon Group for a debt consolidation programme and for its oil and gas capital expenditure programme aggregating to approximately Rs. 40,000 crore.
Besides CBI, even the income tax (I-T) department has also tracked the Videocon case closely. During the course of investigation, the I-T department on May 15 questioned Mr Dhoot regarding an allegation of tax evasion. Earlier, Deepak Kochhar was also questioned and notices were issued to him for his alleged dealings with Mr Dhoot. The Central Bureau of Investigation (CBI) is conducting a preliminary enquiry in the case, whereby it is probing if there was any quid pro quo arrangement when the loan was issued by ICICI Bank.