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- Copyright:(C)Thu 31 Jan 2019, 07:10:012019Thu 31 Jan 2019, 07:10:01 Bennett Coleman & Co. Ltd, http://info.indiatimes.com/terms/tou.html
- After initial denials, now it has been established by an independent probe that ICICI Bank's ex-CEO Chanda Kochhar had indeed violated the company code of conduct. A committee headed by retired Justice B.N. Srikrishna committee has indicted Kochhar. The indictment comes less than a week after the Central Bureau of Investigation (CBI) turned its preliminary enquiry, in which it was probing the alleged nexus between Deepak Kochhar, husband of ICICI Bank ex-CEO Chanda Kochhar and Videocon group MD Venugopal Dhoot, into an FIR. The CBI has booked the three of them in connection with alleged cheating and irregularities in loans sanctioned by the bank to the Videocon group in 2012. After the CBI probe started last year, Kochhar sought an early retirement and the bank accepted her resignation. Immediately after the Justice Srikrishna committee report, the bank sacked Kochhar and took away many benefits due to her.What did Justice Srikrishna probe?The Justice Srikrishna committee dwelled on whether Kochhar violated the code of conduct by not recusing herself in case of the Videocon loan and whether she made required disclosures related to her husband's and brother-in-law's businesses. After allegations by whistleblowers about a quid pro quo between Videocon, which got a hefty loan from the ICICI Bank, and Kochhar whose husband Deepak Kochhar got money from Videocon, the bank made an internal inquiry and defended Kochhar. MK Sharma, then ICICI Bank chairman, said that the board did not see any conflict of interest since the Videocon group was not an investor in Kochhar's husband's company and, therefore, there was no need for Kochhar to recuse herself from the committee that sanctioned the loan to Videocon. He said the committee had many independent directors and was not chaired by her. He also said that the loan disbursed to Videocon was part of a consortium arrangement where terms and conditions had already been agreed upon by the lender group. Sharma said Chanda Kochhar had also made all the necessary disclosures.
- However, when the issue did not die down, the bank agreed to institute an independent probe by Justice Srikrishna who has now found that Kochhar indeed violated the code of conduct, by not recusing herself from the committee that sanctioned loan to Videocon and not making necessary disclosures required under the company code. It all began with this company Kochhar, whose company NuPower Renewables allegedly received an investment from a Videocon group company as a quid pro quo for a loan from the bank. Dhoot allegedly invested crores of rupees in Nupower months after the Videocon group got Rs 3,250 crore as loan from the ICICI Bank in 2012.How it came to lightThe Videocon loan issue was first raised by whistle-blower Arvind Gupta in 2016 when he wrote about it on a blog. He accused Chanda Kochhar of conflict of interest and corporate misconduct while sanctioning loans to Videocon. Gupta wrote to the Prime Minister, the RBI governor and several other authorities demanding a probe but. However, his complaint drew no response from the authorities. The issue came to the limelight when early last year when a newspaper published an investigation of Gupta's allegations. How the money changed handsWhistle-blower Gupta alleged that a company owned by Dhoot loaned Rs 64 crore in March 2010 to NuPower Renewables that he and Deepak Kochhar had jointly promoted just two years ago. A complex web of deals resulted in a trust controlled by Deepak Kochhar acquiring the lending company six months after the Videocon Group got the loan from ICICI Bank. The transfer of company shares to Kochharâs trust was made at a paltry Rs 9 lakh. A company that loaned an amount as big as Rs 64 crore, was acquired by the trust Deepak Kochhar controlled for as small an amount as Rs 9 lakh. This was the part that raised the eyebrows.Dhoot also sold his 50 per cent stake in NuPower Renewables for just Rs 2.5 lakh to Deepak Kochhar. Gupta alleged that ICICI Bank awarding the loan to Videocon and the loan later becoming an NPA in 2017 were due to Dhoot's business relations with Deepak Kochhar whose wife, Chanda, was part of the committee that sanctioned the loan. Nearly 86 per cent of Videocon's ICICI Bank loan remains unpaid.
- Two days before the new e-commerce rules kick in, e-commerce giants Walmart-backed Flipkart and Amazon are still hopeful of an extension to the February 1 deadline and are making last-ditch efforts to convince the government that more time is needed for revamping operations.According to multiple industry executives, these two companies continue to engage -- directly as well as through associations and trade bodies -- with government officials seeking to convince them to push the deadline.In December, the government had announced new regulations - under Press Note 2 - that would bar online marketplaces with foreign investments from selling products of the companies where they hold stakes and ban exclusive marketing arrangements.Another provision states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor's purchases are from the marketplace entity, including the latter's wholesale unit.These changes are expected to hit Amazon and Flipkart the hardest.Emails sent to Amazon didn't elicit a response, while Flipkart declined to comment.A senior executive, who did not wish to be identified, said these companies remain hopeful and are still reaching out to officials to explain the overhaul required in business models to ensure compliance with the new rules.The person added that there are 'complexities' that need to be addressed and doing so will require more time.Another executive said these companies have highlighted that they have committed billions of dollars to the Indian market and that these investments could be at risk.Amazon had committed an investment of over USD 5 bn, while Walmart made its biggest bet pumping in USD 16 bn for 77 per cent stake in Flipkart.Given the magnitude of investments at stake, the companies are also keeping their plan B ready in case the deadline isn't extended.Senior leaders and officials are working on an overdrive to ensure that the exclusive partnerships are restructured and other aspects are taken care of to ensure compliance, the official quoted above said.Amazon and Flipkart have already written to the government stating that they need more time to understand the details of the framework.However, it seems unlikely that the Department of Industrial Policy and Promotion (DIPP) would postpone the implementation date.Smaller e-commerce firms like Snapdeal and ShopClues as well as offline retailers have also written to Commerce Ministry, urging the government to not give into pressure from US companies and authorities.
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Thursday, January 31, 2019
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