The Enforcement Directorate (ED), in an appeal filed before the Prevention of Money Laundering Act (PMLA) tribunal last week, sought to establish that ICICI Bank’s former managing director and chief executive officer Chanda Kochhar had close links with the Videocon Group that she did not disclose to the bank.
Such a disclosure would have made her ineligible to be on the sanctioning committees approving loans to Videocon, it claimed.
The agency is investigating Kochhar’s role in sanctioning loans to Videocon in return for the latter’s promoter, Venugopal Dhoot, investing in her husband’s companies. The case, based on a whistleblower complaint, was responsible for Kocchar’s exit from the bank.
ED’s latest disclosure came when it challenged the November 6 order of its own Adjudicating Authority (AA) under PMLA, Tushar V Shah, who dismissed the attachment of properties worth Rs 78 crore belonging to Kochhar and her husband Deepak Kochhar. While asserting that ED had failed to establish these as the proceeds of crime, Shah termed the investment of ₹64 crore in Deepak Kochhar’s Nupower Renewables Ltd (NRL) by Venugopal Dhoot’s SEPL (Supreme Energy Pvt Ltd) as a business transaction.
In its appeal dated November 25, reviewed by HT, ED said Chanda Kochhar “knowingly didn’t disclose to the ICICI Bank that she and her husband had a very close association with VIL (Videocon Industries Ltd), its group companies as well as Mr V N Dhoot (Chairman of Videocon) since the year 1994-95.”
{{/usCountry}}In its appeal dated November 25, reviewed by HT, ED said Chanda Kochhar “knowingly didn’t disclose to the ICICI Bank that she and her husband had a very close association with VIL (Videocon Industries Ltd), its group companies as well as Mr V N Dhoot (Chairman of Videocon) since the year 1994-95.”
{{/usCountry}}“She neither disclosed that she was a shareholder in Credential Finance Limited (a company in which Videocon was having substantial interest) nor that she was authorized signatory for Pacific Capital Services Pvt Ltd (50% shareholder of her husband’s Nupower Renewables Ltd), even at the time she was the MD and CEO of ICICI Bank,” ED added.
The agency also claimed that “funds were transferred from Chanda Kochhar’s salary account held with the ICICI Bank to CFL. If she had disclosed these facts to the ICICI Bank, then she would have to recuse herself from the recommending and sanctioning committee dealing with the proposal of Videocon Group of Companies”.
According to ED, Videocon had invested Rs 10 crore in this company and Chanda Kochhar held 2,835 equity shares in it in 2000-01.
Coming down heavily on the AA , ED said in its appeal that: “AA has jumped into the shoes of the special court under PMLA, as if it were hearing the final arguments”.
The agency has accused the AA of making a “roving and fishing enquiry into the evidence placed on record and relied upon” by it. ” The AA was not required in law to venture into the quality of evidence placed on record by the appellant against the respondent (Kochhars)”, the appeal read.
Seeking to set aside Shah’s November 6 order, ED said the order was passed “without application of mind” and “against the mandate of the PMLA”.
The Kochhars’ lawyer Vijay Aggarwal said: “ED appeal is even technically wrong as it has been filed by a deputy director and as per law can be filed by only a director. And on merits, they also know that they don’t have a case but as one appeal is provided in law so they have availed the remedy knowing fully well that attachment is purely conjectural”.