ICICI Bank and its chief Chanda Kochhar are already under the scanner of multiple agencies at home, from CBI to the Securities and Exchange Board of India (Sebi), and now US markets regulator Securities and Exchange Commission (SEC) has also entered the picture.
Sources told PTI that the SEC is actively looking into the allegations of impropriety and reciprocal benefits that the bank and Kochhar are battling since ICICI Bank is also listed in the US. SEC may also seek further details on the matter from Sebi, its Indian counterpart. The latter has already issued show-cause notices to ICICI Bank and Kochhar as part of its probe.
Last week, media reports claimed that the embattled parties had sought more time to respond, requesting Sebi to share the documents on the basis of which the notice was served. Officials say that the sought clarificatory details would be provided to the bank and its CEO, among others to whom notices have been served.
In a development that could possibly compound ICICI Bank's woes, the Indian regulators and investigative agencies are mulling seeking help from their overseas counterparts including in Mauritius as part of their own probes, officials said.
The country's second-largest private lender has been embroiled in controversies ever since investor and whistleblower Arvind Gupta alleged a 'quid pro quo' in ICICI Bank's Rs 3,250 crore plus Rs 660 crore loans to Venugopal Dhoot-owned Videocon Industries. He had alleged that it was the time when an identical 10 per cent foreign funding (Rs 325 crore and Rs 66 crore) made its way to NuPower Renewables. The bank has denied the allegations, saying the loans were part of a consortium of lenders that extended the facility to Videocon.
Earlier in March, when news reports first surfaced in this regard, the bank had said that its board has "full confidence and reposes full faith" in Kochhar.
Subsequently, fresh allegations of quid pro quo were levelled by Gupta, who also accused the Ruia brothers of Essar group of having received undue favours from the bank for "round-tripping" investments into NuPower Group. The allegation here is that NuPower bagged investments of Rs 325 crore from Mauritius-based Firstland Holdings, a company owned by Nishant Kanodia, son-in-law of Essar Group co-founder Ravi Ruia. Business Today had first broken the story of links between Deepak Kochhar, Nishant Kanodia, Essar Group and ICICI Bank.
While the Essar Group dismissed these allegations as "motivated", and maintains that it has no business interest in Firstland Holdings, ICICI Bank in response has already instituted an independent enquiry into the allegations.
With multiple companies involved in the controversy, the Ministry of Corporate Affairs is also looking into the matter now. "The ministry is looking at allegations with respect to fraudulent, preferential or under-valued transactions... (related to) those companies which have come into controversy in the light of ICICI Bank issue," said a senior official. He added that the affairs of ICICI Bank are not being looked into by the ministry as that is completely under the purview of the Reserve Bank of India (RBI).
Last week, Interim Finance Minister Piyush Goyal said the law will take its own course in the alleged case of nepotism at ICICI Bank, even though it is a good bank with "very robust processes" and there was no cause for concern for any of the stakeholders of ICICI Bank per se. But the fact that the bank's stock is now down 8 per cent in a month is hardly comforting.
With PTI inputs