Rajiv Kochhar, Avista Advisory's founder and CEO, and brother-in-law to ICICI Bank's chief, Chanda Kochhar , was intercepted at Mumbai airport on Thursday while he was about to board a flight for a South East Asian country, on the basis of a look-out circular issued by the investigative agency.
He was then reportedly taken to CBI's Bandra office where he was grilled for six hours in connection with ICICI Bank's alleged quid pro quo loan of Rs 3,250 crore to Videocon Group in 2012 as well as his links with Venugopal Dhoot, the promoter of the Videocon Group. According to officials, the CBI questioned Rajiv for the second day today.
The Indian Express recently reported that over the past six years, Avista Advisory got the mandate to restructure foreign currency-denominated debt deals worth over $1.7 billion of seven companies, all of which had taken loans from ICICI Bank at the same time.
For instance, the Singapore-based financial services company acted as "Debtor Advisor" in the restructuring of $200-million FCCBs of Jaiprakash Power Ventures Ltd. ICICI Bank was not only a lender to the latter but also received equity under the corporate debt restructuring package. A similar story played out with GTL Infrastructure in 2012. Significantly, Avista's website mentions two loan restructuring deals involving the Videocon Group.
According to the India Today, Chanda's husband Deepak Kochhar will also be interrogated by the CBI. The latter has already registered a preliminary probe naming Dhoot, Deepak and unidentified others in connection with the loan. A preliminary inquiry is the first step by the CBI to gather information about the allegations. If the agency is convinced there exists prima facie material in the matter, it may register a regular case against the accused. The CBI has already questioned some ICICI officials, who were part of the entire loan process in 2012, as part of the probe to find any quid pro quo.
Deepak is the co-founder and CEO of NuPower Renewables, a firm originally founded as a 50-50 joint venture between the family of Videocon Industries Limited chief Venugopal Dhoot and the Advani family. Around that time, Chanda Kochhar was the CFO and Joint MD at ICICI Bank. Central investigators swung into action when the mainstream media accused the Kochhars of wrongful personal gains from the loan mentioned above to Videocon Group companies.
Even as all the parties involved have been vociferously denying allegations of wrongdoing and any conflict of interest, the Income Tax Department has reportedly already swung into action. "Deepak Kochhar along with few other people of the firm has been served notices by the department [under provisions of section 131 of the Income Tax Act]. All have been asked to furnish the required details and submit some documents," a source told India Today. Section 131 empowers income tax authorities to conduct inquiries. It provides powers to summon persons/witnesses, examine them under oath, compel production of books of accounts and documents as well as issue commissions.
The Serious Fraud Investigation Office (SFIO) has reportedly also sought permission from the ministry of corporate affairs to probe the case.
Deepak Kochhar, however, in an interview to India Today has said investigative agencies have not reached out to him or his wife for questioning. "I will have to give all documents to investigative agencies when they ask. I will. I have not been asked yet for questioning. Chanda has not been asked yet for questioning," he said.
Business Today has previously reported that the report on the basis of which the bank decided to back Chanda was an internal evaluation carried out by Chairman MK Sharma. No third party or external consultancy, accounting or forensics firm was hired to present its findings before the board. Propriety demands that the process should have been evaluated and vetted by a third party instead.
With PTI inputs