After CBI and Income Tax, now Serious Fraud Investigation Office (SFIO) has sought permission from Ministry of Corporate Affairs to probe ICICI Bank's Rs 3,250 crore loan to Videocon Group. The SFIO had last month received a letter from a whistle-blower which termed the business transactions of ICICI Bank-Videocon as 'corporate malpractice, surreptitious transactions and round tripping of money', the Moneycontrol reported today citing a source. The SFIO wants to investigate the business dealings as it concerns public money which runs into several thousand crores, the report said.
According to the report, the probe agency has submitted a preliminary report to the Ministry of Corporate Affairs. "In the preliminary report, there are many transactions which need to be investigated," a source told the Moneycontrol. The Ministry may decide on the probe within this week, the report said.
If the Ministry gives the go ahead, the SFIO will become the third investigating agency to probe the alleged favouritism in sanctioning the multi-billion loans to the Videocon Group. The CBI and Income Tax Department have already begun the investigation into the case. The probe began after whistle-blower Arvind Gupta in a letter to the Prime Minister red-flagged ICICI Bank's lending practices and accused the bank's CEO Chanda Kochhar of favouring the Venugopal Dhoot-led Videocon Group.
At the centre of the controversy is the business dealings between ICICI Bank CEO's husband Deepak Kochhar and Venugopal Dhoot. In the letter addressed to the Prime Minister, Gupta alleged that the ICICI Bank declared Rs 2,810 crore outstanding loan to Videocon as NPA during the period when Chanda Kochhar's husband through some murky transactions with Venugopal made huge money. Gupta said that the profit was a quid pro quo.
ICICI Bank board and Videocon Group Chairman Venugopal Dhoot both have rejected the allegations. Last week, the ICICI Bank in a statement termed the whole allegations as 'malicious and unfounded rumours'. It said: "...there are adequate checks and balances in loan appraisal, rating and approval processes within the Bank, both from the control as well as from a governance perspective. No individual employee, whatever may be his or her position, has the ability to influence the credit decision at the Bank."
Venugopal Dhoot said that there was no quid pro quo from ICICI Bank to Videocon as the bank under the consortium arrangement with other lenders sanctioned the money. "The sanction by the ICICI Bank has been done on the merit of the projects and therefore, there is no question of any quid pro quo," he added.
Earlier this week, the CBI questioned a few ICICI bank officials as part of a preliminary enquiry to find if any quid pro quo was involved. The agency is expected to summon Chanda Kochhar and her husband for questioning into the case. The Income Tax Department has also sent notice to Deepak Kochhar, asking him to furnish all the details regarding personal finances, Income Tax Returns, and business transactions with his companies. The I-T notice to Deepak Kochhar has been issued under section 131 (power regarding discovery, production of evidence) of the Income Tax Act.