ED slapped Rs 14-cr penalty on Videocon, 6 group companies in 2017

New Delhi, May 28 (IANS) The Enforcement Directorate in Mumbai had levied a penalty of Rs 14 crore on Videocon, along with six group companies and Venugopal Dhoot in May 2017, according to a leading economic daily on Monday.

It said the penalty was imposed following a reference from the Reserve Bank of India (RBI) which had examined these entities as part of a probe into conflict of interest allegations against ICICI CEO Chanda Kochhar in 2016. The ED penalty was on the grounds that these companies had violated foreign exchange laws, The Economic Times said. 

IANS queries to ED remained unanswered.

An additional penalty of Rs 45 lakh was also imposed collectively on Venugopal Dhoot and on directors of Videocon and the six group companies, the paper said. 

The order -- passed by ED on May 26 last year revolved around loan disbursed and investments made by Videocon overseas company, Tusker Overaeas Inc. 

Tusker Overseas Inc, based in the Cayman Island, was set up by six Videocon group companies on January 10, 2006. Subsequently, Tusker Overseas came under the scanner of the RBI for loans disbursed to it by ICICI's overseas branches.

Tusker finds a significant mention in RBI's 2016 report on allegations of quid pro quo with regard to extension of facilities by ICICI Bank to Videocon, The Economic Times report said.

According to allegations levelled by a whisleblower in 2016, the loans to Videocon, were a quid pro quo for investments by Videocon-lined entities to a company owned by Chanda Kochhar's husband Deepak Kochhar.

The Securities and Exchange Board of India (SEBI) on May 25 had sought responses from ICICI Bank's MD and CEO Chanda Kochhar on alleged non-compliance of the "erstwhile 'Listing Agreement' and the 'Listing Obligations and Disclosure Requirements) Regulations, 2015'".

According to a BSE filing, SEBI sought the reply via a notice issued to the private lender and its MD and CEO on May 24.

As per the securities market regulator's LODR regulations, all listed entities are mandated to immediately disclose relevant and important information to stock exchanges. 

"The MD and CEO and the bank received a notice from SEBI on May 24, 2018... requiring responses on matters relating to alleged non-compliance with certain provisions of the erstwhile 'Listing Agreement' and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015'," the filing said.

"The notice has been issued based on information furnished by the bank or its MD and CEO to diverse queries made by SEBI concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group and Nupower, an entity in which Deepak Kochhar, spouse of MD and CEO has economic interests."

The bank said that appropriate responses would be submitted to SEBI in accordance with regulation.

The SEBI notice comes more than a month after nepotism and conflict of interest allegations were levelled against Kochhar. It has been alleged that Kochhar had wrongfully granted a loan to Videocon Group and that her husband's company -- NuPower Renewables -- received a loan from the Videocon Group's Chariman Venugopal Dhoot on a quid-pro-quo basis. 

Chanda Kochhar on May 7 had said that the private lender works under, and abides by, all regulatory norms and that it has been fully cooperating with regulatory and investigative agencies.

On March 29, ICICI Bank Chairman M.K. Sharma had said that reports alleging nepotism by Kochhar were unfounded and malicious in nature.

Saying that ICICI Bank's exposure to the Videocon Group (Videocon Industries and 12 of its subsidiaries or associates as co-obligors) for a debt consolidation programme and for the group's oil and gas capital expenditure programme aggregating approximately Rs 40,000 crore was less than 10 per cent.

Sharma had asserted that no individual bank employee has the ability to influence decisions of the credit committee.