ICICI-Videocon saga: 'prima facie' money laundering case against Chanda Kochhar, says tribunal

An appellate tribunal in Mumbai has said there was a "prima facie case" of money laundering against former ICICI Bank CEO and MD Chanda Kochhar and her husband in a corruption case involving the Videocon Group, while upholding a 2020 ED order attaching a Mumbai flat of the couple worth crores of rupees.

The tribunal, in an order issued recently, said it found "substance" in the "quid pro quo" allegation made by the Enforcement Directorate against Chanda Kochhar for sanctioning Rs 300 crore as loan to Videocon International Electronics Ltd (VIEL), as Rs 64 crore was transferred by the Videocon Group to her husband Deepak Kochhar's company NRPL, after the loan was disbursed.

The loan was approved by a sanctioning committee of ICICI Bank between June 2009 and October 2011, and Chanda Kochhar was a member of this panel, apart from being the MD and CEO of the private lending company.

The ED case, based on a CBI FIR, claimed that Chanda Kochhar hatched a "criminal conspiracy" to cheat ICICI Bank by "abusing" her official position. As per the probe agencies, she got illegal gratification/undue benefit through her husband from VIL or Videocon Group promoter V.N. Dhoot.

The ED had in January 2020 provisionally attached Kochhars' flat at 45, CCI Chambers at Churchgate in Mumbai, a property of NRPL, apart from Rs 10.5 lakh in cash, seized by the agency during searches in another Deepak Kochhar company.

The Adjudicating Authority of the Prevention of Money Laundering Act (PMLA) had in November 2020 refused to confirm the ED attachment following which it went to the appellate tribunal.

"It may be true that the issue will be determined by the Trial Court but we find a prima facie case against the respondents for commission of the offence of money laundering and, therefore, the Provisional Attachment Order (of the ED) is justified," the tribunal said.

It said there was "total inter-fixing of the work of the industries floated by Deepak Kochhar and even by the Videocon Group of Industries".

The tribunal rejected Chanda Kochhar's argument that she was "not knowing the business affairs of her husband" and had pleaded ignorance in her submission.

The respondent (Chanda Kochhar) was expected to conduct herself as per the rules and policy of the bank and could not have pleaded ignorance about the association and affairs of the husband, it said in an 82-page order.

"...the sanction of a loan of Rs 300 crore by ICICI Bank to the Videocon Group of Industries, where Chanda Kochhar remained part of the committee, was against the rules and policy of the bank," it said.

The tribunal said the flat was purchased from the above-mentioned Rs 64 crore "diverted" funds and hence was attached by the ED, calling it proceeds of crime. "We do not find any illegality in that (ED) order, rather find perverse finding in the hands of the Adjudicating Authority on all the issues relevant to the case," it said.

The tribunal rejected Chanda Kochhar's argument that the decision to sanction the loan to Videocon Group of Industries was not by her but by a committee and, therefore, there was "no link" between the sanction of the loan and the transfer of Rs 64 crore by the Videocon Group of Industries.

"The argument aforesaid was contested and we find that appellants (ED) have given complete chain of events to show how a case of money laundering is made out and before that a predicate offence (the CBI case)," it said.

"The provisional attachment order dated 10.01.2020 for the properties other than for Rs 10.5 lakh is confirmed," it said while upholding the ED action.