Indian police have launched a preliminary investigation into the husband of ICICI Bank’s (ICBK.NS) chief executive, as well as officials at the lender and at Videocon Group (VEDI.NS), two sources said on Saturday, to assess whether there was any wrongdoing in lending practices.
Reports in many Indian media outlets in the past week have alleged that Videocon Group chairman Venugopal Dhoot invested 640 million rupees ($9.83 million) in Nu Power Renewables, a firm owned by Deepak Kochhar, the husband of ICICI Bank CEO Chanda Kochhar, after Videocon secured a loan from a consortium of banks, including ICICI.
India’s Central Bureau of Investigation (CBI) launched a preliminary inquiry about two months ago to assess whether “nepotism” or “criminality” were involved, the two sources told Reuters, declining to be named. The investigation was ongoing, one source said.
ICICI Bank did not immediately respond to a request for comment, while Deepak Kochhar and Dhoot declined to comment.
In 2012, a consortium of more than 20 banks and other financial institutions approved loans of 400 billion rupees ($6.14 billion) to Videocon for debt consolidation, and an oil and gas capital expenditure program.
Of this, ICICI Bank provided 32.5 billion rupees after its own credit panel approved the loan, ICICI Bank said in a statement earlier this week, that it was “important to note that Ms. Chanda Kochhar was not the chairperson of this committee”.
India’s banking sector has been on edge in recent weeks after state-run Punjab National Bank (PNBK.NS) said that it had discovered that bank officials had issued nearly $2 billion of fraudulent loan guarantees. The case has stunned financial markets and led to heightened levels of investor concern around any wrongdoing at Indian banks.