New Delhi: The Enforcement Directorate (ED) claims to have “substantial evidence to prove its case” against former ICICI Bank MD and CEO Chanda Kochhar and her husband Deepak Kochhar, who are accused of arranging loans from the lender for Videocon Group in exchange for alleged “pecuniary benefits”.
The primary allegation against the couple is that Kochhar abused her position in ICICI over two years to dispense Rs 1,875 crore in loans to Videocon, which then allegedly invested a part of this money in companies held by Deepak Kochhar. The loans in question were allegedly sanctioned by ICICI between June 2009 and October 2011.
This money was then allegedly laundered by the Kochhars using a complex web of companies.
The Kochhars and Videocon Group chairman Venugopal Dhoot have earlier denied all allegations.
Deepak Kochhar was arrested Monday and is currently under the ED’s custody, where he will be questioned and confronted with several documents recovered by the agency that are believed to establish the money trail.
So, what exactly is the evidence with the ED? ThePrint accessed documents presented by the ED in court and spoke to agency officials to piece together the case built so far by the anti-money-laundering agency.
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‘Funds moved through complex web of companies’
ED documents accessed by ThePrint suggest that the first of the transactions under investigation took place on 7 September 2009. That’s the day ICICI Bank disbursed a loan of Rs 300 crore (the actual disbursed amount was Rs 283.45 crore) to Videocon International Electronics Limited (VIEL).
This loan was meant for capital expenses by Videocon Industries Limited (VIL), another company owned by Dhoot, the ED says.
On the very next day, the ED claims, Rs 64 crore was transferred by VIL to a company called NuPower Renewables Pvt. Ltd (NRL) — formed the same year — through another firm named Supreme Energy Private Limited (SEPL).
This money, the ED claims, was drawn from the loan granted to VIL.
According to the ED, NRL is owned, controlled and managed by Deepak Kochhar and he has been its director since its incorporation in 2008. He is also the authorised signatory for the bank accounts of NRL and its subsidiaries, it said.
SEPL, meanwhile, was acquired by Pinnacle Energy — a family trust of Deepak Kochhar, who is also a managing trustee — on 20 September 2012, the ED claims. “SEPL was controlled, handled and managed by Kochhar from 2012 onward,” the ED adds. The documents don’t say who owned SEPL before 2012.
The ED has claimed in the documents that linking NRL and SEPL to Kochhar establishes the fact that the Rs 64 crore investment was quid pro quo for the loans sanctioned to VIL. According to the ED, an elaborate web of entities was created to hold this amount.
“Loan funds traveled from VIL to NRL through SEPL. But two intermediary companies were brought in for the purpose of layering,” an ED official claimed.
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‘Properties bought using proceeds of crime’
Describing the sum of Rs 64 crore as “proceeds of crime”, the ED claims it was utilised by NRL to purchase properties, including “wind term projects” or wind power projects of 33.15 MW capacity.
Another property under the ED’s scanner in connection with the case is a residential one at 45 CCI Chambers, Churchgate, Mumbai. According to the ED, the property was purchased for Rs 5.25 crore on 19 February 1996 by Credential Finance Limited (CFL), a company in which Videocon Group had a “substantial interest along with Deepak Kochhar, Chanda Kochhar and their family”.
CFL allegedly defaulted in repaying a Rs. 4.7 crore loan availed from SBI Home Finance, for which the apartment was placed as security.
The Videocon Group, the ED says, paid off the loan to SBI Home Finance and, in 2009, the ownership of the apartment was transferred to QAPL, a Videocon Group Company.
Then, in 2016, the total shareholding of QAPL was acquired by a family trust of Deepak Kochhar where he serves as managing trustee, the ED claims. Deepak Kochhar and his family have been residing in this flat since 1996, the ED states.
“This clearly shows the association between Venugopal Dhoot of Videocon with Deepak and Chanda Kochhar,” an ED officer said.
The ED, the officer added, has dug out several records pertaining to “more properties in which proceeds of crime were invested and will soon start the process of attachment”.
‘Loan not used for what it was sanctioned’
The ED, according to court documents, also has records to establish that the aforementioned loan of Rs 300 crore to VIEL was not used for the stated purpose, that is capital expenditure “requirements on machinery, accessories and spare parts for manufacture of display units by VIL”.
VIEL did transfer loan funds to VIL, in keeping with the agreement with the bank, but VIL then transferred Rs 64 crore to NRL through SEPL, the ED claims. This, it adds, was in “contravention of the terms of loan sanctioned”.
When the loan was sanctioned in 2009, Chanda Kochhar was the chair of the ICICI sanctioning committee that approved the loan to VIEL, the ED states. Chanda Kochhar was also part of the decision-making process, as member of the recommending and sanctioning committees, for the other loans sanctioned to Videocon Group by ICICI Bank, the agency claims.
“With this, Chanda Kocchar not only violated ICICI Bank Code of Conduct but also SEBI Listing Regulations,” a second ED official said.
“Board of ICICI Bank found her guilty of willful and gross misconduct, gross negligence and that her actions were detrimental to the interests of the bank,” the official added.
In January 2019, a panel set up by the bank to look into the allegations against Kochhar had reportedly found her guilty of violating ICICI’s code of conduct and its conflict of interest regulations. Her resignation was then treated as termination and Chanda Kochhar stripped of all her entitlements.
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What is Kochhar being questioned on?
According to the ED, Deepak Kochhar is now being questioned about the sources of suspected funds received by NRL. By questioning him, the agency seeks to unearth the exact source of funds, decipher the money trail, ascertain “further proceeds of crime”, and determine the role of various other persons who “facilitated the offence of money-laundering”.
“We need to ascertain all his known, unknown entities, accounts involved in money-laundering or transfer of funds. We have to confront him with the voluminous evidence on record which is available in Delhi office from where investigation is being carried out, including digital records, which are presently available in Cyber Lab of this Directorate in Delhi and others,” the ED said in the remand application filed in court soon after Kochhar’s arrest.
The ED also told the court that Kochhar has been “totally non cooperative, evasive and misleading during the investigation conducted till now”.
“Deepak Kochhar is involved in the laundering of the proceeds of crime and has been involved in projecting the proceeds of crime as untainted,” the ED said.
“He… is knowingly a party and is actually involved in the process or activity connected with the proceeds of crime and projecting it as untainted property. He is, in fact, owning and continuing to enjoy the proceeds of crime generated from the criminal activity related to the scheduled offences in this case,” the ED added.
Deepak Kochhar’s lawyer Vijay Aggarwal has, however, termed his arrest “illegal”. “The arrest is illegal as my client has been cooperating in the investigation and the offences are punishable with imprisonment of up to 7 years, so he cannot be arrested like this when he joined investigation on summons,” he had told ThePrint Tuesday.
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