The Central Bureau of Investigation (CBI) has booked Videocon Industries Ltd chairman Venugopal Dhoot in a corruption case for allegedly duping a consortium of banks, led by the State of Bank of India, of hundreds of millions of US dollars. Along with Dhoot, who has been booked under charges of corruption, cheating and criminal conspiracy, the CBI has also booked unknown officials of the consortium of banks.
The case is related to an oil block in Mozambique where Videocon had interests, and it had taken a loan from Standard Chartered Bank (SCB) in London. This loan was repaid by the consortium led by SBI against the Mozambique assets, but the consortium did not take charge of the assets and Videocon continued to avail of credit facility from SCB on the block. The block was finally sold to ONGC Videsh Ltd and Oil India Ltd in 2014 for $2,519 million.
The FIR is a result of the completion of a ‘preliminary enquiry’ (PE) that the CBI had opened earlier against unknown officials of the Ministry of Petroleum and Natural Gas, ONGC Videsh, Oil India Ltd, Bharat Petro Resources Ltd and the consortium of banks. The PE had alleged that these entities had “colluded with the directors and promoters of M/s Videocon Mozambique Rovuma 1 Ltd (VMRL), a subsidiary of M/s Videocon Hydrocarbons Holding Ltd (VHHL) (a company registered in Cayman Istands) with an intent to cause undue pecuniary gain to Videocon Industries Limited (VIL)”.
According to the CBI, the preliminary enquiry found that in 2008, VHHL acquired 10 per cent participating interest in oil and gas block in Rovuma Area 1 Block Mozambique from M/s Anadarko (a US-based petroleum company). VHHL also had oil and gas assets in Indonesia and Brazil.
In the month of April, 2012, the consortium of banks sanctioned the Standby Letter of Credit (SBLC) facility of $2,773.60 million to VHHL for appraisal and development of their overseas oil and gas asset in Mozambique, Brazil and Indonesia, and other funding requirements. The SBLC facility at $1,103 million was refinanced, which includes outstanding amount of $400 million of Standard Charted Bank, London, the CBI has alleged. “The first charge on VIL’s oil and gas asset was a part of CSB security,” the CBI has said.
In February, 2013, VIL informed the consortium that the SCB loan has increased from $400 Million to $530 Million and requested the consortium for pay the loan and to take over charge of the assets. “The SBI-led consortium without any verification/inquiry, approved and paid the loan of $530 million to SCB, London,” the CBI has said, adding that it did not even take charge of the assets. The CBI also said that the SCB loan account was not closed by VHHL.
“The SBI consortium in connivance with VIL did not create the charge on the assets with dishonest intention to facilitate VHHL, who continued to avail the facility from SCB London backed by Mozambique oil and gas asset,” the CBI has said.
To get a lender-NOC for the sale of assets to ONGC VIdesh and OIL, in November 2013, VIL requested the consortium to pay the outstanding amount to SCB from the sale proceeds of the Mozambique asset. “The SBI led consortium in conspiracy with VIL did not raise any objection to the fact that the outstanding at SCB, London, has been already paid by the consortium in Feb 2013. It was agreed that the outstanding at SCB London be paid and should not exceed $650 million,” the CBI said. Despite this, more than $700 million were paid to SCB, it added.
The CBI has also accused VIL of diverting funds, saying, “The enquiry has revealed that the VIL used the funds availed from SCB for some other purposes or siphoned the same in some other accounts of Videocon or its promoters. Enquiry has further revealed that till December, 2013, VIL spent an amount of only $374 million, $554.83 and $25.25 million towards Mozambique, Indonesia and Brazil oil and gas assets respectively since date of acquisition to December, 2013, against which VHHL availed the facility of $1,616 million.”-The Indian Express