Mumbai: The ministry of corporate affairs (MCA) has discovered at least 25 violations of the Companies Act by NuPower Renewables Ltd and Videocon Industries Ltd, the companies at the heart of the controversial ICICI Bank-Videocon loan case, two people aware of the matter said.
The report prepared by MCA’s Mumbai regional director will be submitted to the union finance ministry this week. The alleged breaches, however, do not pertain to transactions where charges of conflict of interest and quid pro quo have been levelled.
“The MCA had initiated a probe against the companies last year to examine violations of Companies Act. The findings indicate that the companies defaulted on at least 25 occasions and were in contravention of the provisions of the Companies Act. The report will be submitted to the finance ministry later this week, with an opinion on strictures against the companies and their directors," said the first of the two people cited earlier, a government official. Both the people spoke on condition of anonymity.
Mint has not reviewed the contents of the report.
Messages sent to Venugopal Dhoot, chairman of Videocon Group, and Deepak Kochhar, founder of NuPower Renewables, remained unanswered till press time.
Chanda Kochhar, ICICI Bank’s former managing director and CEO, was part of a credit committee that sanctioned a loan of ₹3,250 crore to Videocon Group. The transaction turned controversial when it came to light that her husband Deepak Kochhar’s NuPower Renewables received funds from Dhoot.
On 30 January, the board of ICICI Bank fired Kochhar and asked her to return bonus payments since 2009, after an internal inquiry charged her with violating the bank’s code of conduct.
“The violations against NuPower Renewables, the company owned by Deepak Kochhar, and Videocon Industries include irregularities in appointment of directors, some of whom the corporate affairs ministry suspects to be shadow directors," the second person cited earlier said, referring to directors who exist only on paper.
Other violations by Videocon and NuPower, the second person said, include false disclosures about board meetings and inadequate or misleading disclosures in annual reports and financial statements.
“NuPower and Videocon were also found to be irregular with their board meetings and issuing shares to directors beyond prescribed limits. Loans were also extended to the directors of Videocon beyond prescribed limits," this person added.
Under the Companies Act, such violations attract fines, removal from directorship and a jail term for repeat offences.
MCA is the third agency probing alleged lapses in ICICI Bank loans to Videocon.
The Central Bureau of Investigation (CBI) registered a case of misuse of public office and cheating against the Kochhars and Dhoot on 22 February 2018. The alleged lapses occurred in sanctioning of ₹1,875 crore loans by ICICI Bank.
Out of this loan sanctioned in 2012, an amount of ₹300 crore, according to CBI, was given as part of a quid pro quo arrangement.
The Enforcement Directorate (ED) on Friday conducted searches at the residence of the Kochhars and the offices of Videocon. They were also called in for questioning over the weekend. ED is also probing Matix Group in connection with the alleged transactions between Firstland Holdings and NuPower Renewables.
On Sunday, ED quizzed Matix Group owner Nishant Kanodia, son-in-law of Essar Group chairman Ravi Ruia.