Videocon Group “had no serious intention to recover” Rs 64 crore that it had transferred to Kochhar group of companies, according to an investigation report of the corporate affairs ministry (MCA) that is unravelling the complex maze of firms floated by the two groups.
The probe report accessed by ET also stated that Kochhars’ NuPower Renewables utilised the said amount in March 2010 towards its purchase of wind energy generators from Shriram Transport Finance Company (STFCL) and Shriram City Union Finance (SCUFL) for approximately Rs 73 crore.
MCA is also probing if NuPower also received Rs 325 crore from Firstland Holdings, owned by businessman Nishant Kanodia, it said.
“NuPower acquired wind powers from Shriram Group and also constructed its own wind power business by consolidation funds in its kitty (sum total of funds from Videocon, Firstland, DH Renewable, bank loans, etc.),” the report said.
The Mumbai regional office of MCA in the past has questioned Videocon chairman Venugopal Dhoot, NuPower founder Deepak Kochhar, as well as his wife and former ICICI Bank MD Chanda Kochhar, who was not a director in any of the companies being probed.
“While MCA regulates the affairs of the companies in India and doesn’t probe conflict of interest, in this case there was a need to quiz Chanda Kochhar,” said a person familiar with the probe. “Her appointment as the ICICI Bank CEO & MD has been mentioned in the report as it is pertinent to note that the advances were transferred in her husband’s companies from Videocon and Firstland Holdings around the time ICICI granted loans to either their group firms or those associated to them.”
While detailing the sequence of event relating to the incorporation of companies and movement of funds, the MCA report noted, “May 2009 — Chanda Kochhar becomes the CEO & MD of ICICI Bank Ltd”.
The Kochhars and Dhoot are being probed by multiple agencies, including the Central Bureau of Investigation for allegation of quid pro quo, and the Enforcement Directorate for alleged money laundering.
When contacted, Dhoot denied that his group had no intention to recover the funds. “We would like to outrightly deny that Videocon Group had no serious intention to recover the funds and would like to submit that the said findings could have been on the ground that Real Cleantech, the company which owns investment, is struck off by the Registrar of Companies, Mumbai, Maharashtra, under Section 248 of the Companies Act, 2013, in September 2018, due to non-filing of financial statements and annual return-…for financial years ended March 31, 2016, and March 31, 2017, and on the assumption that Real Cleantechis a dormant company and had not been doing any business/operation for the last two immediately preceding years,” he said in an email reply to ET.
Kochhar was not reachable for comment. According to the MCA report, Videocon never came clean on the advance of Rs 64 crore to Supreme Energy — a company promoted and incorporated by Dhoot, but by 2012 it was owned by Deepak Kochhar.
“VIL has not separately disclosed this amount in its financial statements but it is admitted on oath that the amount was clubbed in figures under the head ‘advances’ but was also not disclosed as related-party transactions as required under AS-18 as Supreme was a related party of VIL. Violation on these counts and also of Section 295 of CA, 1956 is reported in the inspection report of VIL,” it said.
The company took a contradicting stand before market regulator Sebi and CBI on the said advance, MCA noted. “Attention is invited to letter dated 12.06.2018 given by VIL to Sebi wherein it is mentioned at para 1(c) that ‘This was a decision in terms of authority as a matter is very old, we are rechecking whether there was any contract to this effect’. Further, in para 1(d) it is stated that ‘no approval of audit committee was taken on the date of advance as there was omission on the part of Venugopal N Dhoot to disclose the interest in the entity’,” it said.
However, “in a letter dated 25.04.2018, Dhoot has reported to CBI that ‘with reference to the captioned preliminary enquiry, I, hereby, submit that in my capacity as chairman and managing director of Videocon Industries (the company), I have been entrusted with substantial powers of management inter alia, including the authority to make investments/extend loans, advances, etc., accordingly, `64 crore given by the company to Supreme Energy is within the powers entrusted upon me’,” MCA said.―India Finance News