The Securities and Exchange Board of India (SEBI) has issued notice to ICICI Bank and its managing director and chief executive officer (MD&CEO) Chanda Kochhar in the Videocon loan matter, which also involves Nupower Renewables, a company promoted by her husband Deepak Kochhar.
“The MD&CEO and the bank received a notice from SEBI on May 24, 2018... The notice has been issued based on information furnished by the bank/its MD&CEO to queries made by SEBI concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group & Nupower, an entity in which Mr. Deepak Kochhar, spouse of the MD&CEO, has economic interests,” the bank said in a stock exchange announcement on Friday.
Though the capital market regulator had issued the notice on Thursday, the bank’s stock exchange statement was issued only after market hours on Friday. Shares of ICICI Bank lost a marginal 0.25% on Friday to close at ₹296.50.
The watchdog has issued the notice for the bank’s alleged non-compliance with certain provisions of Securities Contracts (Regulation) (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules 2005 and also SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, according to the exchange statement.
In its statement, the bank stated that “appropriate responses would be submitted to SEBI in accordance with regulation.”
Sandeep Parekh, founder, Finsec Law Advisors, and a former executive director of SEBI, said the capital market regulator could impose a monetary penalty on the entities to whom the notice has been sent. “The notice has been sent for non-compliance with listing regulations and the regulator can impose only a monetary penalty. If in case the regulator wants to take any other remedial action like debarment then it will have to send a separate notice,” said Mr. Parekh.
The case pertains to a loan of ₹3,250 crore given by ICICI Bank to Videocon Group in 2012. In March, the Central Bureau of Investigation disclosed that it had started a preliminary inquiry into the loan and is looking into an alleged link between the loan and the funding of NuPower Renewables, a company founded by Mr. Kochhar and others.
The CBI has already examined some officials of ICICI Bank in connection with the probe and has also questioned Rajiv Kochhar, the brother-in-law of Ms. Kochhar. Meanwhile, the PE has named Videocon Group promoter Mr Dhoot, Deepak Kochhar and unidentified others.
Apart from the CBI, the Enforcement Directorate is also probing the matter.
