ICICI FRAUD CASE

1. ICICI FRAUD CASE
Nasim Khan
Shivam Narula
Prashant Kumar
Akansha Agrawal

2. TEAM
Prashant Kumar
PGDM, PIBM
Akansha Agrawal
PGDM, PIBM
Shivam Narula
PGDM, PIBM
Nasim Khan
PGDM, PIBM
2

3. Introduction
Kochhar is facing allegations of money laundering
charges in India. She has been arrested by Central
Bureau of Investigation in December 2022, in a case
linked to alleged loan fraud charges. In 2019, the
case has been filed for giving high-value loans to
Videocon with conspiracy during 2009.

4. Persons Involved
Chanda Kochhar
Former CEO, ICICI Bank
Deepak Kochhar
CEO, NuPower
Venugopal Dhoot
CEO, Videocon Group

5. Companies Involved

6. Kochhar was born in Jodhpur, Rajasthan in a Hindu
Sindhi family. She was educated at St. Angela Sophia
School, Jaipur. She moved to Mumbai, where she
joined Jai Hind College and earned a bachelor of
commerce degree from the University of Mumbai.
After graduating in 1982, she studied cost
accountancy at the Institute of Cost Accountants of
India, and obtained a master of management studies
degree at the University of Mumbai from Jamnalal
Bajaj Institute of Management Studies.
In 1984, Kochhar joined the Industrial Credit and
Investment Corporation of India (ICICI) as a
management trainee. In 2009 Kochhar was appointed
as managing director and chief executive officer of
the bank and has been responsible for the bank's
diverse operations in India and overseas. She also
chairs the boards of most of the bank's subsidiaries,
which include India's leading private sector life and
general insurance companies.
About Chanda Kochhar
Bank Carrier of Kochhar

7. Understanding Transaction
• Videocon group got a Rs 3,250 crore loan from ICICI Bank.
• Loan of 1730 Cr INR becomes Non Performing Asset for ICICI Bank.
• Chanda Kochhar was on the sanctioning committee to authorize loans.
• ICICI Bank was part of a consortium of banks lending money to the Videocon group
for the group’s oil and gas capital expenditure programme.

8. Diving Deep into the case
• Deepak Kochhar and Dhoot together set up NuPower Renewables Pvt. Ltd.
(NRPL), in December 2008.
• Deepak Kochhar, Pacific Capital (owned by his father), and Chanda Kochhar’s
brother’s wife held a 50% stake in the company.
• remaining 50% was held by Dhoot along with his family members and associates.
• Dhoot resigned from his position as director in NRPL in January 2009.
• He thereafter transferred his 24,999 shares in the company to Kochhar for a sum
of Rs. 2.5 lakh.

9. Lets make it more complex
• In March 2010, NRPL obtained a loan from a company owned by Dhoot (99%
holding), Supreme Energy Pvt. Ltd. (SEPL).
• SEPL became a 94.99% shareholder in NRPL by the end of March 2010.
• The remaining 4.99% was held by Deepak Kochhar.
• Dhoot transferred his entire shareholding in SEPL to Mahesh Chandra Puglia in
November 2010
• Punglia then transferred his holding to Pinnacle Energy, which was a trust wherein
Deepak Kochhar was the managing trustee, between September 29, 2012 to April
29, 2013; for Rs. 9 lakh.
• In short, Dhoot enabled the transfer of SEPL to Kochhar indirectly through a
complex web of transactions.

10. Aftermath
• Dhoot reportedly diverted 64 Crore INR to Nu Power as a loan trough complex
transactions.
• Complete loan of 3250 Crore INR was declared Non Performing Asset.
• ICICI bank recorded loss of 1730 Crore INR after declaration of NPA.
• Chanda Kochhar did not revealed any direct or indirect relation with other two
companies.

11. Related Party Transactions
• In business, a related party transaction is a transaction which takes place between
two parties who hold a pre-existing connection prior to the transaction
So did the sanctioning of the
loan by Chanda Kochhar to the
Videocon group constitute a
related party transaction under
the Companies Act, 2013?

12. Related Party Transaction
• Section 2(76) of the Companies Act prescribes 9 distinct categories of related
parties including:
• (i) a director or his relative;
• (ii) a key managerial person or his relative;
• (iii) a firm, in which a director, manager or his relative is a partner;
• (iv) a private company in which a director or manager or his relative is a member
or director;
• (v) a public company in which a director or manager is a director or holds along
with his relatives, more than 2% of its paid-up share capital;
• (vi) any body corporate whose director/ manager acts in accordance with the
advice, directions or instructions of a director or manager;

13. Related Party transaction
• (vii) any person on whose advice, directions or instructions a director or manager
is accustomed to act;
• (viii) a director (who is not an independent director) or key managerial personnel
of the holding company or his relative with reference to a company;
• (ix) any company which is a holding, subsidiary or an associate company; or a
subsidiary of the same holding company; or an investing company/venturer12, of
the company.

14. Conclusion
• The only sub-clause under which Chanda Kochhar could possibly be brought
under the ambit is sub-clause (vii), which talks about any person on whose advice
a director is accustomed to act.
• This sub-clause coincides with the concept of a shadow director; and in such
transactions it must be shown that the director did not exercise any judgement or
discretion on his own part.
• Ultimately Chanda Kochhar was arrested for cheating and fraud relating to loan of
3250 Crore INR to Videocon Group

15. 15
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