Arvind Gupta, a trustee of the Indian Investors Protection Council who exposed the alleged Videocon loan fraud, has levelled fresh allegations of quid pro quo against ICICI Bank Chief Executive Officer Chanda Kochhar, PTI reported on Saturday. Gupta has claimed that the bank had favoured Ruia brothers of Essar group for “round-tripping” investments into Chanda Kochhar’s husband Deepak Kochhar’s NuPower Renewables.
In a letter addressed to Prime Minister Narendra Modi on May 11, Gupta alleged that NuPower received round-tripped investments of Rs 453 crore from Essar Group, routed through Matix Group and its holding entity Firstland Holdings Limited – both based in Mauritius. The firms are owned by Nishant Kanodia, who is the son-in-law of Essar Group Vice Chairman Ravi Ruia, reported Firstpost.
“Unlike [the] Videocon deal, here Essar Group has used front companies in Mauritius to round-trip money to NuPower, not directly,” Gupta told Firstpost.
Gupta cited Register of Companies filings by NuPower and alleged that Firstland Holdings subscribed to 3,243,752 shares of Rs 1,000 each of NuPower Renewables Ltd from December 31, 2010 to March 21, 2012, in four rounds of transactions amounting to Rs 324.37 crore, reported PTI.
The letter also said that Shashi Ruia’s nephew Anirudh Bhuwalka-owned A-One Motors & Services Ltd acquired NuPower Technologies through AMW Motors Ltd – which is eventually controlled by the Essar Group.
“Evidently, the malice of quid pro quo extends to another crony capitalist – the Ruia brothers of the Essar Group now headquartered in Mauritius – the safe haven and a safe passage for global money laundering,” Gupta said in the letter.
These transactions happened when Essar Group got deals from ICICI Bank’s overseas branches in Singapore, the United Kingdom and the United States to acquire Essar Steel Minnesota (USA) and Algoma Steel (Canada), the letter alleged. ICICI Bank, through a consortium as a lead banker, lent $530 million (approximately Rs 355 crore) to Essar Steel in 2010, to Essar Oil $350 million (approximately Rs 234 crore) to acquire Stanlow refinery in the UK, reported PTI.
In response to Gupta’s letter, ICICI Bank said that a consortium of seven Indian banks had sanctioned loans to Essar Steel Minnesota. “Out of the total debt of the company of $1.02 billion (approximately Rs 6828 crore), ICICI Bank’s share was less than 25%,” the bank said.
An Essar Group spokesperson said the accusations in the letter were libellous and that the group does not “have any business interest in Firstland Holdings Ltd”. “AMW Motors Limited Mumbai has not made the investment of Rs 197 crore in Nupower, contrary to the claims made in the letter,” the spokesperson said.
Matix Group, in a statement, said that the claims made in the letter are “false and baseless”. “Firstland Holdings’ investment in NuPower was made on merit to participate in the renewable energy sector, and has since been divested,” it said.
In March, the Central Bureau of Investigation started a preliminary enquiry to determine whether ICICI Bank violated any law by sanctioning a Rs 3,250-crore loan to the Videocon Group in 2012. Videocon Group CEO Venugopal Dhoot allegedly provided crores of rupees to NuPower Renewables six months after his company received the loan. The loan was part of the Rs 40,000-crore loan that Videocon secured from a consortium of 20 banks.
On Wednesday, ICICI Bank announced that it had ordered an independent investigation into allegations of conflict of interest in Chanda Kochhar’s dealings with certain borrowers. The board of ICICI Bank has backed Chanda Kochhar, saying there was no quid pro quo, nepotism, or conflict of interest on her part in the loans granted to the Videocon Group.