After a report in The Indian Express alleged impropriety and a possible quid pro quo in ICICI Bank’s Rs 3,250 crore loan to Videocon group, the bank’s chairman responded to the allegations saying that all the due processes were followed and there was no wrongdoing in granting of the loan. In a press conference, ICICI Bank Chairman M K Sharma mostly reiterated the ICICI Bank’s statement of yesterday, wherein the board had backed MD and CEO Chanda Kochhar, seeking to quell the report that the loan was given improperly.
According to a report in The Indian Express, Videocon chairman Venugopal Dhoot started a joint company with ICICI Bank MD and CEO Chanda Kochhar’s husband Deepak Kochhar and two of her other relatives. The report claims that a staggering Rs 2,810 crore out of the Rs 3,250 crore loan has remained unpaid. The account of Videocon was declared a non performing asset (NPA) in 2017. The report further claims that this Dhoot-Kochhar-ICICI web of transactions is under scanner of investigative agencies. We take a closer look at what MK Sharma has to say in his defence-
ICICI Bank’s exposure to Videcon is less than 10% of total lent by consortium
Addressing the press, ICICI Bank’s Chairman MK Sharma pointed out that a consortium of over 20 banks where State Bank of India was the lead agent had sanctioned facilities to the Videocon group aggregating to approximately Rs. 40,000 crore. According to a recent review by the bank’s board, ICICI Bank exposure to Videocon at the time was at Rs 3,250 crore, less than 10% of the total amount lent by the consortium. Sharma reiterated that ICICI Bank followed the same terms and conditions that was followed by all the other banks. Notably, the initial due diligence for the financing programme was prepared by the lead arrangers namely SBI CAPS and IDBI Bank. Sharma said the question of any special benefit to Videocon group by ICICI Bank doesn’t arise.
Committee included even independent directors
M K Sharma also said that the committee which approved the loan was chaired by the then Chairman of ICICI Bank and it included many independent and working Directors of the Bank. Further, he reiterated that Chanda Kochhar was not the Chairperson of this committee. Sharma also said that no single individual in whatever position can influence the lending of credit to specific borrowers.
Chanda Kochhar part of credit committee not a conflict
M K Sharma said that while Chanda Kochhar was part of the credit committee which sanctioned the loan, the board doesn’t believe it represents a conflict as Videocon group is not an investor in NuPower. Hence, there was no need for Chanda Kochhar to recuse herself from the committee.