The Securities and Exchange Board of India (SEBI) has issued notices to ICICI Bank and chief executive officer (CEO) Chanda Kochhar seeking responses to allegations regarding dealings with Videocon Group and a company in which Kochhar’s husband had a stake.
The notices, sent on Thursday, also seek responses to allegations regarding non-compliance with the listing agreement, ICICI Bank said in a stock-exchange filing.
“The notice has been issued based on information furnished by the bank and its managing director and CEO Chanda in responses to queries by SEBI on dealings between ICICI and Videocon Group and NuPower Renewables, an entity in which husband Deepak Kochhar has economic interests,” said ICICI Bank’s statement filed with the stock exchanges after market hours.
The Indian Express newspaper had first reported in March this year that law enforcement agencies were investigating a web of transactions involving Deepak, Chanda, her bank and Venugopal Dhoot, the promoter of the Videocon Group.
It then detailed how in December 2008, Deepak, along with two relatives, set up NuPower with Dhoot, who then gave the company a Rs 64 crore loan through a fully-owned entity, before transferring the company’s ownership to a trust headed by Deepak, for just Rs 9 lakh.
This transaction raised issues of conflict of interest, nepotism and quid pro quo, as just six months ago, Dhoot had received a Rs 3,250 crore loan from ICICI Bank, of which Rs 2,810 crore remains unpaid. Moreover, last year, the Videocon account was declared a non-performing asset.
The Central Bureau of Investigation (CBI) also questioned Chanda’s brother-in-law Rajiv, the Economic Times had reported.
On Friday, ICICI Bank’s shares on the BSE ended down 0.25% to close at Rs 296.5 apiece. The stock had lost as much as 15% after the allegations in late March through April, before recovering 13%.
The stock is down nearly 20% from the peak of Rs 365.6 apiece in January this year.
India’s second-largest private sector lender, ICICI Bank, on its part, had denied doing any favour to Dhoot or his company and said it had replied to all the questions raised by regulators. Videocon, too, has denied any wrongdoing.
These allegations are not new, and had been made by a Videocon shareholder in 2016.
Banks have been besieged by allegations of fraud.
India’s second-largest public sector lender, Punjab National Bank, is embroiled in a Rs 13,000 crore alleged fraud by diamond merchants Nirav Modi and Mehul Choksi. Also, there is a Rs 3,700 crore alleged scam involving pen maker Rotomac Global and officials of various banks.
In March, CBI registered a case against Hyderabad-based Totem Infrastructure and directors for allegedly cheating eight lenders, including Union Bank, out of Rs 1,394 crore ($214 million).
State-run lender IDBI Bank, too, has filed multiple cases of alleged cheating in relation to Rs 772 crore of bank loans for farm-fishing businesses in Andhra Pradesh.