Whistle-blower in ICICI Bank case writes another letter to PM Modi

Even as ICICI Bank set up an enquiry to investigate an anonymous whistle-blower’s complaint, activist shareholder Arvind Gupta has written another letter to Prime Minister Narendra Modi, with new allegations against the lender, Chanda and Deepak Kochhar, the Ruias-owned Essar group and Ruias’ relatives.

Gupta, a Delhi-based trustee of the Indian Investors Protection Council, first made an appeal in 2016. He had petitioned for an investigation into what he deemed "an illicit banking and commercial relationship between the Videocon Group of Venugopal Dhoot and ICICI Bank's MD and CEO Chanda Kochhar's family-owned NuPower Renewable Group, steered by her husband, Deepak Kochhar".

Last month, on May 11, he wrote again. This time, pointing to what he described as "murky corporate dealing of Essar Group of companies led by Shashi Ruia and Ravi Ruia with the ICICI Bank via their son-in-law Nishant Kanodia of Firstland/Matix Group and nephew Anirudh Bhuwalka of AMW Motors Group, for round-tripping funds via Mauritius in the NuPower Group owned by Deepak Kochhar". His letter was sent to the prime minister, finance minister, and heads of the Reserve Bank, Securities and Exchange Board of India, Central Vigilance Commission, Central Bureau of Investigation and Serious Fraud Investigation Office. He says he got no response.

In his letter, Gupta said Matix Group was a proxy investor for the Essar Group in making quid pro quo investments in NuPower Renewables. Matix Group firm Firstland Holdings had invested Rs 3.25 billion in NuPower, later acquired at the same price by Mauritius-based DH Renewables.

The ownership of DH Renewables is not known and Gupta said “the impending discovery of the ownership” would unmask the real identity.

He asked for an independent investigation by the government/regulator in the matter.

When asked, an Essar spokesperson said: "We strongly condemn these allegations, which are clearly motivated. Essar does not have any business interest in Firstland Holdings. Moreover, as we understand, AMW Motors has not made the investment of Rs 1.97 billion in NuPower, contrary to the claims made in the letter. Essar has been dealing with ICICI since 1980."

Spokespersons for the Kanodias’ Matix Group said they "categorically and unequivocally refute the allegations”. “The letter makes claims that are completely false and baseless, and seem to be driven by a vested interest and an ulterior motive. Essar does not have any business interest in Firstland Holdings, contrary to what is being alleged. Firstland Holdings’ investment in NuPower was made on merit, to participate in the renewable energy sector, and has since been divested. No loans were ever taken by Matix from ICICI Bank."

On Friday, ICICI Bank said Chanda Kochhar was on her annual leave, planned in advance. And, that the board had not appointed any search committee to find a successor. However, the board of directors had decided to institute a probe, headed by “an independent and credible person”, at a meeting this Tuesday. The enquiry will investigate allegations of Chanda Kochhar not adhering to their code of conduct and if there was any conflict of interest or quid pro quo with the bank’s borrowers.

Those tracking the case indicate Gupta is not the "anonymous whistle-blower" mentioned in ICICI Bank’s statement to the stock exchanges on Wednesday, as he has disclosed his identity. When asked, the bank declined to comment on details of the whistle-blower’s complaint.

On the possible identity of the whistle-blower, Gupta told Business Standard, "It could be someone internal, as most banks would not act on an external whistle-blower’s complaint."