Related Party Transactions

Here are the details of this corporate-banker nexus outed by ICICI Bank and Videocon investor Arvind Gupta.

Gupta’s curiosity was aroused by a 10 per cent coincidence he noticed in ICICI’s loans to Videocon group companies and foreign fund inflows into husband Deepak Kochhar’s firm NuPower Renewables.

NuPower Renewables was originally founded as a 50-50 JV between the Dhoot family and the Kochhar and Advani families .Chanda Kochhar’s brother is Mahesh Advani.

In May 2009, Chanda Kochhar became the CEO & MD of ICICI Bank Limited. Upon Chanda Kochhar becoming CEO & MD, the identity and ownership of the NuPower Renewables Private Limited was masked by transferring the shareholding to “Pinnacle Energy” (A Trust) where Mr. Deepak Kochhar ,the husband of Chanda Kochhar is the Managing Trustee.

ICICI loaned Rs 3,250 crore to Videocon group companies. Exactly 10 per cent of that amount (Rs 325 crore) was invested in NuPower in the form of compulsorily convertible preference shares by Mauritius-based Firstland Holdings. That investment was later transferred to DH Renewables Holding Limited, also from Mauritius.

Gupta also noticed that the Videocon Group Company based in Cayman Islands – Tuskar Overseas – also received funding worth Rs 660 crore from ICICI Bank’s UK and Canada branches. This coincided with Venugopal Dhoot-owned Supreme Energy funding NuPower with unsecured loans worth Rs 64 crore.

Gupta sensed something fishy. His enquiries led him to Mauritius-based DH Renewables Holding Limited through a multi-layered and complicated holding structure. “What does ‘DH’ stand for – Dhoot or for Deepak?” asks Gupta.

ICICI Bank’s Board is making soothing noises, denying all wrong doing.And a few media houses are lending their talents to sell the bank’s PR Story.

Me? I’m just rooting for all the Gupta-like investors to point out all such “coincidences”. Let’s find out how much of a Banking Industry Standard practice such deals are. Why buy the idea that ICICI Bank is an exception, without subjecting all other banks in the consortium to a similar scrutiny ?

NB:Any readers having any such stories, I’m happy to publish them.

Let’s also watch the media houses playing down the story and ask who exactly owns/controls them.