ICICI Bank says loans to Videocon did not cause any 'wrongful loss'

There was no issue of wrongful loss and violation or contravention of rules and policy, the bank said

ICICI Bank has reiterated to the Central Bureau of Investigation (CBI) that there has been "no wrongful loss" to the bank while authorising its sanction to prosecute former MD and CEO Chanda Kochhar, reported The Economic Times (ET).

This is the conclusion of the bank’s board in line with the opinion of a former judge, ICICI Bank said in a communication to the CBI.

The bank added that this has nothing to do with "whether the alleged crime(s) has/have been committed." 

In its chargesheet against Kochhar and her husband Deepak, the CBI said that they, along with the other accused, including businessman VN Dhoot, caused a loss of Rs 1,033 crore to ICICI Bank. 

 

However, the bank stated in its note to the CBI that at a meeting on April 22, the board of directors deliberated on the need to reaffirm that it had not incurred any wrongful loss and that due process had been followed in sanctioning loans to Videocon companies.

“It was noted that Justice Dr Arijit Pasayat (retd) has also opined that approval for sanction to prosecute Chanda Kochhar, if granted by the board, should specifically state the bank’s stand as stated while granting approval under Section 17A of the Prevention of Corruption Act,” the communication reads. ICICI Bank had sought Pasayat’s opinion on the matter.

The bank stated that this refers to all six standalone loans to Videocon Group companies — Millennium Appliances India Ltd, Videocon International Electronics Ltd, Sky Appliances Ltd, Techno Electronics Ltd, Applicomp India Ltd, and Videocon Industries Ltd — that are being investigated by the CBI.

“Hence there was no issue of wrongful loss and violation or contravention of rules and policy. The stand of the bank continues to be the same,” the bank contended.

The bank further said that if a manager accepts a bribe to sanction a loan, but the loan is repaid with interest, the lender suffers no loss.

“Board further noted that the question whether financial loss has been occasioned on account of impugned transactions is not the determinative factor while dealing with the issue as to whether the alleged crime(s) has/have been committed,” the bank said.

Kochhar’s counsel Amit Desai had previously argued that the CBI had erred on facts in the case.

“When the bank has specifically stated that there was no wrongful loss to the bank in any of these transactions, then how can the CBI say it’s a case of wrongful loss,” Desai had contended during the course of the remand hearings before the special CBI court in December 2022.

The bank clearly mentioned the errors of fact in the CBI first information report (FIR), he had argued at the time.

“Contrary to what the CBI claims, the loans were sanctioned following due process,” he said, adding that “no Reserve Bank of India guidelines had therefore been violated”.