Numerous high-profile scams involving the Indian banking system in recent years have brought attention to the need for increased regulation and control in the industry.
The underlying cause of these financial crimes in the banking industry of India is frequently connected to shortcomings in governance. These include inadequate internal controls and compliance frameworks, inadequate supervision and oversight of bank employees, and a dearth of consequences for misconduct.
Additionally, the banking industry operates with a lack of integrity and transparency, which facilitates the occurrence of fraud and allows it to go unnoticed for extended periods of time.
ICICI-Videocon case study
Facts of the ICICI bank Videocon case:
- The year 2008 saw the founding of “NuPower Renewable Private Limited” (NRPL), a business in which Mr. Venugopal Dhoot, Chairman of the Videocon Group, and Mr. Deepak Kochhar, the former CEO of ICICI Bank, each held an equal share.
- Mr. Dhoot sold it to Mr. Kochhar in 2009. “Supreme Energy” was incorporated in the same year, with Mr. Venugopal Dhoot and Mr. Vasant Kakade serving as directors.
- Following Chanda Kochhar’s appointment as the bank’s CEO, the loan transactions commenced. Six loans totaling Rs. 175 crores and Rs. 300 crores were approved for the Videocon Group in 2009, Rs. 240 crores and Rs. 110 crores in 2010, and Rs. 300 crores and Rs. 750 crores in 2011.
- The bank suffered a significant loss in 2012 after declaring Rs. 1,730 crores as non-performing assets (NPA).
- Due to financial difficulties in 2010, “NuPower” obtained a loan of Rs. 64 crores from “Supreme Energy,” a business owned by Mr. Dhoot, with the understanding that Mr. Dhoot would receive certain “NuPower” shares.
- “Supreme Energy” gave its partner, Mr. Mahesh Chandra Punglia, ownership of the company in 2011.
- In exchange for a pitiful 9 lakhs, Mr. Punglia sold all of the shares to Mr. Kochhar’s company, “Pinnacle Energy,” in 2012.
- The Videocon group received a loan of ₹3,250 crores from ICICI Bank in April 2012. There had been no conflicts up until this point in the ICICI bank Videocon loan case.
- But when Rs. 2,810 crores were reported as non-performing assets (NPA) in 2017 and Ms. Kochhar was the bank’s CEO at the time, issues started to arise. NPAs are loans that the bank believes will not be repaid.
- On May 23, 2018, SEBI sent notice to ICICI Bank’s CEO & MD & asked to submit a response by Jun 7.
- In Jun 2018, the Bank appointed former Supreme Court judge BN Srikrishna for independent investigation in the Deepak Kochhar Videocon case.
- Regarding purported irregularities in transactions between the lender and private entities, the Central Bureau of Investigation on January 22, 2019, filed a first information report against Chanda Kochhar, the former managing director and CEO of ICICI Bank Ltd., her husband, Deepak Kochhar, and VN Dhoot, the managing director of Videocon Industries Ltd.
- On December 23, 2022, the CBI arrested the couple Chanda Kochhar and her husband Deepak Kochhar in relation to the Videocon- ICICI bank scam case.
icici-Videocon case study: Why were the Couple Arrested?
- On December 23, 2022, the CBI arrested former ICICI Bank CEO, Chanda Kochhar, the former head of ICICI Bank, and her husband, Deepak Kochhar, over suspected irregularities the Videocon Group received a loan of ₹3,250 crore in 2012. It claimed that the transactions benefited Kochhar’s family and her spouse.
- The charges state that months after the Videocon group was given a loan by ICICI Bank, former Videocon chairman Venugopal Dhoot reportedly invested crores of rupees in NuPower Renewables, a firm created by Deepak Kochhar.
ICICI bank scam news: Why in News Today?
The icici Videocon case news which is referred to asChanda Kochhar news orChanda Kochhar husband news made an unexpected turn today.
- The Bombay High Court on February 6, 2024, finally upheld an interim ruling on the release of former ICICI Bank CEO as well as MD Chanda Kochhar and her husband Deepak Kochhar from custody in the ‘ICICI Bank – Videocon Loan Fraud Case’ on January 9, 2023, declaring their arrests unlawful.
- The judge dismissed the CBI’s justifications for the arrest, which included the defendants’ refusal to cooperate and reveal the whole facts of the case, as stated in the arrest memo from December 2023. The court further noted that when the judge gave their custody to CBI, he neglected to appropriately document his own satisfaction.
- After strongly criticizing the CBI for carrying out the arrest in a “casual and mechanical” way and without application of mind, the HC granted bail to the two in its interim ruling and declared their arrest to be illegal.
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