At Rs 16.25 mn, combined losses mounted for Kochhar firms in FY17

ICICI MD's brother-in-law is reported to have helped the bank's clients recast foreign loans

Two India-registered companies belonging to Rajiv Kochhar, brother of ICICI Bank managing director and chief executive Chanda Kochhar's husband, Deepak Kochhar, suffered combined losses of Rs 16.25 million in 2016-17, their highest in four years.

The Avista Advisory group, a Singapore-based company owned by Rajiv Kochhar, is said to have helped ICICI clients in restructuring their foreign loans. On Thursday, the Central Bureau of Investigation (CBI) stopped Rajiv Kochhar at the airport here and questioned him. He was let go on Thursday but again called for questioning on Friday.

Business Standard looked at the financial results for Avista Corporate Finance Advisory and Avista Advisory Associates, both India-registered companies belonging to Rajiv Kochhar. The former had losses in FY17 and FY15. Avista Advisory had losses in all four years, although the operations appeared limited. FY17 was the worst in losses for both in recent years.

Avista Advisory Associates had revenue from Rs 10,056 to Rs 265,751 between FY14 and FY16. It had zero revenue in FY17. This led to a loss of Rs 82,084.

Avista Corporate Finance Advisory operated on a larger scale. It had revenue of Rs 122.2 million in FY17, higher than the Rs 101.2 mn in FY16. Those for FY15 and FY14 were Rs 144.2 mn and about Rs 78.5 mn, respectively. The company also recorded its biggest loss in FY17, of Rs 16.17 mn, compared to a profit of Rs 1.3 mn the previous year. Its provision for doubtful debts shows an increase every year, from Rs 1.3 mn in FY14 to Rs 89.4 mn in FY17.

The company did not respond to a request for comment on this report.

Rajiv Kochhar is being questioned by CBI in relation to alleged impropriety in a loan ICICI gave to consumer durables firm Videocon. It is being investigated if the loan was granted to Videocon in lieu of the firm's investments in Deepak Kochhar's personal company, Nupower.

Nupower, the ICICI Bank board of directors and Videocon have denied any wrongdoing.

The Kochhar brothers are known in Mumbai's financial circles for setting up Credential Finance in the 1990s. The company folded in the early 2000s and the brothers parted ways. Rajiv Kochhar, who is the son-in-law of Sharad Upasani, former chief secretary of Maharashtra, later went to Singapore to set up the Avista Advisory group.

Over the past six years, Avista won amandate to restructure foreign currency-denominated debt deals worth a little over $1.7 billion of seven companies. All these companies were borrowers of ICICI Bank. In at least one of these deals, ICICI was the lead bank of the lenders, The Indian Express reported on Tuesday.

On Monday, Subramanian Swamy, a Member of Parliament from the Bharatiya Janata Party, had tweeted that the CBI should probe whether Avista Advisory received five per cent on every big loan for certification. Avista, according to an industry source, had expertise in restructuring foreign currency loans in association with Houlihan Lokey, a US-based entity.

Rajiv Kochhar had denied any conflict of interest in business dealings with ICICI Bank, in earlier interviews to the media. "There is no conflict. The entire process of selection of 'debtor advisor' was competitive. We were chosen as a 'debtor advisor' in the restructuring of the FCCBs (foreign currency convertible bonds) of Jaiprakash Associates, Jaiprakash Power Ventures and GTL Infrastructure. In these restructuring transactions, the 'debtor' of the FCCBs were the respective companies and the 'creditor' were the respective foreign currency convertible bondholders who are the 'foreign investors' in these FCCBs. Avista advised the companies in the negotiation with these foreign investors in order to restructure the FCCBs. Since the FCCB restructuring transaction did not involve any negotiations between the companies and domestic lenders, there is no conflict of interest of whatsoever nature," he had said.

According to Avista's website, the company has a strong stressed asset restructuring advisory practice and a successful NPL (non-performing loan) resolution platform in Southeast Asia and India. And, access to a wide spectrum of pools of institutional and private capital. The company was also in the process of setting up a stressed asset and special situation (SASS) investment management and investment advisory platform.