ICICI Bank-Videocon loan whistle-blower claims govt silent on 12 cases raised in the past: Report

The whistle-blower who first red-flagged "the illicit banking and commercial relationship between Videocon Group of Venugopal Dhoot and ICICI Bank's MD & CEO Chanda Kochhar's family" as he put it in his blog post - incidentally two years before the ongoing brouhaha broke out - has reportedly claimed that he'd raised several such cases in the past, too.

Arvind Gupta, the founder and trustee of Indian Investors Protection Council, and a Ph.D in Public Sector Economics, as his blog profile claims, told MoneyControl that he has raised more than 12 cases in the past "which have gone unnoticed by the government".

Just like nobody reverted to his letter highlighting the ICICI-Videocon Group linkages addressed to Prime Minister Narendra Modi on March 15, 2016, with carbon copies sent out to the finance minister, the RBI Governor, SEBI chairman, CBI and Enforcement Directorate directors and more. Gupta, a shareholder of ICICI Bank as well as the Videocon Group, subsequently reproduced this letter on his blog in October 2016 in a post titled 'Banking Sector NPAs from mighty Corporate Cons?', but the matter only came out in the open after the mainstream media reported it last week.

"Not just ICICI Bank, but other banks must also undergo a scrutiny whether this is just a one-off case or there is a pattern in the corporate restructuring or lending (practices) to the corporate houses who are going down the drain," Gupta told MoneyControl, adding that he wants the government and regulators to look into the matter.

Claiming that he is currently following up on another big corporate case, Gupta said that rising corporate frauds is a serious threat to Indian corporate democracy and that just probes are required to bring back faith in the banking system. He pointed out that round-tripping of funds by Indian companies and over-invoicing is one of the oldest practices in the corporate space and summed up saying that "all the information is public", and that it's the right and responsibility of every corporate investor to flag off these wrong practices.

In the aftermath of the recent allegations, ICICI Bank came out with a statement asserting its 'full faith' in Kochar's conduct. Putting its weight behind its celebrated CEO, ICICI Bank said in a statement to the stock exchanges last Wednesday that its board has concluded that there is no question or scope of any favouritism, nepotism or quid-pro-quo.

But that was not enough to stop the stock markets from reacting negatively to these developments. Shares of ICICI Bank Ltd plunged as much as 7 per cent today from its closing price last Wednesday, before the stock market shut down for the long weekend. This wiped out a whopping Rs 11,353 crore from its market valuation during the morning trade. This year, so far, the stock has slumped 15 per cent. Things could get a lot worse for India's second largest private lender by asset if it does not emerge unscathed from the ongoing CBI probe. Last heard, the Enforcement Directorate and the taxman have joined the act, too, and are in the process of gathering evidence.

In any case, it seems the bank has been rattled by the recent developments and is now playing on the defensive. While announcing that its board will meet today "for review of cases which are before National Company Law Tribunal under Insolvency and Bankruptcy Code, and other routine matters" in a BSE filing, ICICI Bank added that the "meeting being held today is a pre-scheduled board meeting".

Labouring the point, the bank further stated, "It's important to note that the board has been meeting regularly in the first week of April in the previous years too, to review progress in resolution of large cases." It is doubtful whether this will help allay its investors' concerns at the moment.

With PTI inputs

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