Chand Kochhar, husband remanded to 3 days CBI custody in loan fraud case

Mumbai A special court on Saturday remanded former ICICI Bank managing director Chanda Kochhar and her husband Deepak Kochhar to CBI custody till Monday.

CBI arrested the Kochhars on Friday evening in Delhi and brought to Mumbai on Saturday morning. They were produced before the special CBI court where prosecutors A Lemozine and PKB Gaikwad sought their three-day custody remand.

The central agency informed the court that the Kochhars were arrested in connection with a case they registered in January 2019 for loans advancement by ICICI Bank to six of Videocon Group firms when Chanda Kochhar was bank’s MD and chief executive officer (CEO). The agency said loans of ₹1,875 crore in all were advanced to the companies, which were reduced to ₹1,730 crore after restructuring, and an amount of ₹1,033 crore was still outstanding.

In its application seeking custody remand of the couple, the agency said that in June 2009 and October 2011, ICICI Bank had sanctioned a rupee term loan (RTL) of ₹1875 crore to six companies of the Videocon Group for the purpose of enabling them to repay the unsecured loan availed by these companies from M/s Videocon Industries Limited (VIL).

All these loans were sanctioned after Chanda Kochhar took over as MD and CEO of the bank, said the plea. Further adding it said Chanda was also on the loan committee when two of these loans were cleared i.e. RTL of ₹300 crore to M/s Videocon International Electronics Ltd (VIEL) and RTL of ₹750 crore to M/s VIL. Besides, the bank had also released the security available in the form of FDR of ₹50 crores in the accounts of M/s Sky Appliance Ltd. and M/s Techno Electronic Ltd without any justification.

The agency added that after the transaction of loan granted to VIEL of ₹300 crore, an amount of ₹64 crores was received by Deepak Kochhar as kick back.

The agency informed the court that it is also probing the transaction by which a flat in Mumbai, valued around ₹5.25 crore was transferred to the family trust of the Kochhars.

The CBI said, as part of another quid pro quo Chanda Kochhar was residing in a flat without consideration during the period she dealt with loan proposal of Videocon Group and sanctioned/recommended for sanction as a member of the committee.

“The flat was under litigation for possession between Videocon Industries Limited and Shri Deepak Kochhar. Subsequently, the flat (valued at ₹5.25 crores in 1996) was transferred to Quality Advisor, a family trust of Shri Deepak Kochhar at meagre amount of ₹11 lacs in 2016,” CBI said in its remand plea.

The agency further stated there was a violation of provisions of banking transactions and also of guidelines laid down by the Reserved Bank of India. The agency hence filed a plea to add the charge of Section 409 (criminal breach of trust by banker) of Indian Penal Code which provides maximum punishment of up to life imprisonment.

Objecting to the remand plea, the couple’s counsel, senior advocate Amit Desai, claimed that the arrest of the couple was illegal and hence they cannot be remanded to CBI custody.

Desai contended that the case has been under investigation since 2018, when the CBI began preliminary probe. He pointed out that they had not been arrested for so many years and there were no allegations that the Kochhars attempted to hamper the probe and their detailed statements with supporting documents have all been submitted with the Enforcement Directorate.

Pointing out that the main beneficiary of the loans (Venugopal Dhoot of Videocon group) has not been arrested, Desai also referred to the letter written by ICICI Bank to the agency in July 202I, stating that the bank had not suffered any wrongful loss due to any of these transactions and stated that there were “errors of facts in the CBI FIR.”

The defence also relied upon the order of adjudicating authority in connection with proceedings for attachment of Kochhar’s flat at CCI Chambers in Mumbai, under provisions of the Prevention of Money Laundering Act, 2002. Desai pointed out that the authority clearly said that the transaction of ₹64 crore was independent of the loan given to Videocon by the bank.

After hearing both the sides, special CBI judge SM Menjoge remanded the couple to CBI custody till Monday. “Perusal of the case diary makes it clear that the offence is of serious nature. As far as arguments of the advocate of the accused is concerned for the innocence of the accused, it cannot be inferred at this stage of remand,” said the court.