Videocon founder Venugopal Dhoot would often quote the Gita to explain his life’s philosophy — “Lord Krishna’s answers give you mental stability and focus,” he once told journalists. On another occasion, he said, “Gita is responsible for my never-say-die spirit”.
As he was arrested on Monday morning and remanded in Central Bureau of Investigation custody till Wednesday in connection with a loan fraud case involving Chanda and Deepak Kochhar, Dhoot might fervently hope the Lord would come to his rescue. But going by the mess he is in, even the Gita would find it difficult to maintain his never-say-die spirit.
Dhoot’ got his first break in the 1970s as a Bajaj Auto products distributor. In the 1980s, when the demand for TV sets rose, he was in the right place at the right time.
Videocon forayed into manufacturing TV sets in a joint venture with Toshiba, and was the first to launch colour TVs in India in the 1980s. The company also marketed Sansui products through a group company, Kitchen Appliances India, and later acquired prominent brands such as Kelvinator, Electrolux and Kenstar.
He was credited for creating the first Indian white goods brand and called the king of mass market, with products including television sets, washing machines, refrigerators and air-conditioners.
Dhoot started his first plant in Aurangabad, Maharashtra, to manufacture TVs and household appliances such as washing machines, which were a big hit with the country’s middle class due to competitive prices. The company competed with global majors, mainly the Korean biggies, but emerged “successful” as it was the first choice of buy for many Indians.
Videocon also went on to acquire Dutch consumer products major Philips India’s TV manufacturing facility in 1999, mainly to ramp up production and fulfil demand from eastern states. The group’s products were endorsed by film stars such as Shah Rukh Khan, Saif Ali Khan and Abhishek Bachchan.
VN, as he was fondly known in the industry, began diversification in 1994, with the group acquiring a 25% stake in Revva Oil Fields in Andhra Pradesh and later to real estate and other sectors.
Till about 2008, Videocon was doing pretty well in all businesses it ventured into.
Then, came the fatal mistake — one that has been the graveyard for many companies in India — entry into the telecom sector. Videocon group acquired 2G licence under the then telecom policy of approvals on a first-come-first-served basis. After getting the licence, Videocon borrowed heavily from banks to support its operations and expansion plans. Two years later, the company’s wireless telephony services were available across all telecom circles, with the group investing more than `10,000 crore in its telecom arm.
Following the 2G scam in 2012, in which spectrum and licences were allegedly allotted out of turn, the Supreme Court cancelled many telecom licences, leading to over a dozen telecom service companies shutting down. Videocon Telecom, the subsidiary through which the group provided telecom services, was also impacted, laying off nearly 6,000 employees.
In 2014, Videocon Industries sold its stake in an oil block in Mozambique to ONGC and Oil India for $2.5 billion, while the group continued to repay lenders till 2015. It started defaulting on loan repayments in 2017 and sought a debt restructuring package from lenders.
In 2018, the company’s name was included in the list of firms the State Bank of India wanted to restructure under the Insolvency and Bankruptcy Code. In the bankruptcy court, banks made claims of `64,637 crore from the company. As the court-appointed auditor took over, Videocon’s headquarters in Mumbai were sold by the banks.
To make matters worse for Dhoot, soon after the company was sent to the bankruptcy courts, the cash-for-loan scandal involving former ICICI Bank MD & CEO Chanda Kochhar erupted.
On Monday, he was arrested by the CBI in connection with this case. This followed the arrests of Kochhar and her husband, Deepak, on Saturday.
Dhoot is reportedly turning approver in the case. Lord Krishna may not approve of it, but that surely is his best bet to get a reduced punishment.