Former ICICI Bank Chief Executive Officer Chanda Kochhar allegedly misled the Reserve Bank of India in 2014 about a $365-million loan granted to a holding company of Essar Steel Minnesota LLC in Mauritius, The Indian Express reported on Thursday.

The bank was allegedly lending for an earlier loan to be paid off, called “ever-greening” of loans. In July 2014, the RBI had pointed this out when ICICI Bank approved increasing Essar Steel Minnesota’s project capacity of manufacturing steel pellets. In September 2014, the bank informed the RBI that although it had approved the capacity increase, it had not “participated in any additional funding”. But records show that the bank had extended a $365-million foreign currency term loan to Essar Steel Ltd, Mauritius.

Kochhar was part of the credit committee meeting that sanctioned the loan. Investigators found that she violated her duty under the Companies Act 2013 and SEBI listing norms by making “inaccurate and misleading statements” to the RBI.

According to records accessed by The Indian Express, Essar Steel Mauritius allegedly used the loan money to make payments to Essar Projects. Essar Projects then transferred the funds to Essar Global Fund Ltd, promoter of Essar Steel Minnesota, which finally used it to pay its debt to ICICI Bank.

Essar Group is one of the largest borrowers of ICICI Bank. Between April 2009 and March 2018, the bank granted 71 loans to the group. The bank did not conduct any formal inquiry even after it received an external complaint in 2013 alleging that no financial institution was willing to lend to the group.

In April 2014, the chief financial officer of Essar Steel Minnesota wrote to ICICI Bank requesting waivers for breaches like failing to provide timely audited financial statements and late payment of interest. Records reveal that ICICI’s Committee of Senior Management waived these breaches and defaults in their meeting on April 10, 2014.

An ICICI Bank spokesperson told The Indian Express via email that all these incidents happened between 2011 and 2016, and that the bank has taken significant steps after that. “The bank has designed and implemented a board-approved revised Risk Management Framework with effect from March 2016,” said the unidentified spokesperson. “As per this framework, a hard limit was stipulated on corporate borrower groups as well as lower-rated companies. Under this framework, about 80% of the incremental loans sanctioned and disbursed by the Bank have been to borrowers with a credit rating of A– and above. This was a sharp departure from the previous framework followed by the Bank. Hence, your contention that the bank did not act on the concerns raised is totally wrong.”

An Essar Group spokesperson said loans taken from ICICI Bank were used in full compliance with the terms of their sanction. “These loans, together with interest thereon, have already been fully repaid. Essar Steel Ltd, Mauritius and Essar Global Fund Ltd do not have any dues to ICICI Bank on account of the loans taken by them,” said the spokesperson. “Overall as a group Essar has repaid Rs 1,39,000 back to the banking system over the last two years.”