Sebi serves notice on ICICI Bank and CEO Chanda Kochhar over Videocon loans
26 May 2018
Market regulator Securities and Exchange Board of India (Sebi) on Thursday served notice on ICICI Bank Ltd and its chief executive and managing director Chanda Kochhar seeking response over alleged non-compliance with certain lending norms.
The notice relates to the bank’s dealings with Videocon Group and NuPower, an entity in which Chanda Kochhar’s husband Deepak Kochhar has economic interests.
ICICI Bank said it would respond to the Sebi notice, adding that the notice was in response to information given by the bank and its CEO on earlier queries over the dealings with Videocon.
Appropriate response would be submitted to Sebi, the country's largest private bank said in a stock exchange filing.
ICICI, India’s third-biggest lender by assets, is battling allegations that Kochhar allegedly favoured Videocon Group in its lending in return for Videocon’s founders investment in NuPower Renewables, a renewable energy company founded by her husband.
The CBI launched a preliminary investigation into the Rs3,250 crore loan ICICI Bank had extended to Videocon in 2012 and the possible role of Kochhar's husband, Deepak Kochhar.
Reports have alleged that Videocon chairman Venugopal Dhoot invested Rs64 crore in Nu Power Renewables, a firm owned by Deepak Kochhar after Videocon secured a loan from a consortium of banks, including ICICI.
ICICI denied any wrongdoing in lending to Videocon, saying it was part of a consortium of lenders that extended the facility to Videocon. The bank also backed Kochhar, calling the rumours “malicious and unfounded”.
"The MD & CEO and the Bank received a Notice from SEBI on May 24, 2018 ... requiring responses on matters relating to alleged non-compliance with certain provisions of the erstwhile Listing Agreement and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015," the bank said in the filing.
The notice, it further said has been issued based on information furnished by the Bank / its MD & CEO to diverse queries made by Sebi concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group and Nupower, an entity in which Deepak Kochhar, husband od MD and CEO of the bank, has economic interests.
"Appropriate responses would be submitted to Sebi by the bank in accordance with regulation," ICICI Bank added .
Last month, ICICI Bank chairman M K Sharma had said the board has full confidence in Chanda Kochhar and ruled out any quid pro quo as alleged with regard to certain loan given to Videocon group.