Why ICICI Bank Issued Loan to 'Sinking' Videocon, Asks Whistleblower; Demands Probe
The board, after a meeting late on Wednesday, concluded that there was no favouritism or conflict of interest in granting of loans to Videocon Industries.
New Delhi, March 30: A day after ICICI Bank board came in support of its CEO Chanda Kochhar on loans given by ICICI Bank Ltd. to Videocon Group, Whistleblower Arvind Gupta has revealed that the evidence claim strong linkages that Chanda Kochhar and her family members are the huge beneficiaries of this loan. Gupta said the Government should order a forensic investigation and audit to check why did ICICI Bank give a loan to a sinking company like Videocon Group.
The board, after a meeting late on Wednesday, concluded that there was no favouritism or conflict of interest in granting of loans to Videocon Industries. ICICI Bank Chairman M K Sharma said the board has full confidence in her and ruled out any quid pro quo as alleged with regard to certain loan given to Videocon group. Sharma said the bank reviewed its internal processes for credit approval and found them to be robust.
It must be noted that this is the second time in two days that the bank has come in support of Kochhar. "No individual employee, whatever may be his or her position, has the ability to influence the credit decision at the bank,” the ICICI Bank said in a BSE filing after the board meeting.
Regarding exposure to the group, the Chairman said the bank's current exposure is a part of the syndicated consortium arrangement. He said rumours are being spread to malign the bank and its top management and also recalled a similar incident saying similar rumours surfaced in mid-2016 and the bank had appropriately responded to them.
"ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10 percent of the total consortium facility in April 2012," Sharma was quoted by PTI.
In 2012, a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon Group (Videocon Industries Ltd and 12 of its subsidiaries/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. As per e regulatory filing by the Bank, ICICI Bank’s share of the banking sector’s exposure to the Videocon Group was less than 10 percent, while around 90 percent of the loans were sanctioned by other banks and financial institutions.
(The above story first appeared on LatestLY on Mar 30, 2018 05:22 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).