Mumbai : Media is thick with reports about investigations being undertaken about financial affairs at ICICI Bank. It is now the turn of the Central Bureau of Investigation (CBI) to begin questioning of not just ICICI Bank officials but also the Kochhars — Chanda and her husband, Deepak. But there is one more Kochhar whose activities in the financial markets may be worth investigating. The person is Rajiv Kochhar, Deepak Kochhar’s brother.
Rajiv is the founder and CEO of Avista Advisory (founded in 2000), a financial services company focussing on South East Asia and India regions. The company claims to offer services like investment banking advisory and asset management. Interestingly, this company has managed to restructure finances or even refinance many big companies – some of them may have borrowed money from ICICI Bank either as the sole source of finance or as part of a consortium of banks.
Rajiv’s website states that Avista has arranged funds or has restructured finances for Videocon on at least two occasions — once in 2015 and later in 2016. In 2015, the RBI mandated that State Bank of India (SBI) and ICICI Bank to become part of the empowered committees for any joint lenders forum (JLF) set up by a consortium for addressing stress in loan servicing.
Interestingly, Avista was also involved in a Maldives Asset Management and Resort Development Project and another similar project in Colombo.
Apart from Videocon, Rajiv’s firm through its website (http://avistaadvisory.com/transactions/restructuring/) claims to have offered its services to companies like Suzlon (in 2014), Jaiprakash Associates (in 2017), GTL Infra (in 2012), JSL (in 2016), Sterling Biotech (in 2013), Jaiprakash Power Ventures (in 2015) etc. It may be significant to note that many of the firms that Avista has engaged with either have stressed assets, or have had them restructured. In both cases, interface with the lenders was inevitable, and it appears that ICICI Bank has acquired stakes of these few companies too.
In the case of GTL, ICICI Bank reportedly acquired a 29.3 per cent stake after taking over 28.5 million shares pledged by its promoter. In the case of Jaiprakash Power, ICICI Bank (as on February 18, 2017) took up a total equity stake of 13.72 per cent in the company. Meanwhile, in 2017, the CBI has alleged that Sterling Biotech had taken loans of over Rs 5, 000 crore from a consortium led by Andhra Bank which has now turned into a non-performing asset. Most of the companies that Avista Advisory has refinanced are distressed companies. It is not known at this stage whether disclosures about Rajiv being an interested party has been made in each instance where loans have been sanctioned or deals have been done by ICICI Bank. Nor is it known if both the Kochhar brothers continued with their business of financial intermediation after Chanda Kochhar became the MD of ICICI Bank, or whether they desisted to prevent a conflict of interest situation.
Board keeps mum on insolvency cases
NEW DELHI: ICICI Bank board on Monday approved redemption of 350 unlisted preference shares of Rs 1 crore each and decided to reclassify all kinds authorised share capital into equity. However, the bank did not say anything with regard to review of insolvency cases which was part of board meeting agenda for on Monday. This is the first time the bank’s board met after the controversy over alleged conflict of interest involving its CEO Chanda Kochhar and Videocon group broke out. Necessary alterations to be carried out in the relevant capital clause of the Memorandum of Association and Article of Association of the bank which would come into effect upon redemption, the bank said. “In view thereof, the board at its meeting approved the redemption on the maturity date along with payment of applicable dividend at the rate of Rs 100 per annum per share of Rs 1 crore each aggregating to Rs 35,000 on the preference shares,” it said.
Bank shares plunge
New Delhi: Shares of ICICI Bank plunged nearly 6 per cent on Monday, wiping out Rs 10,452.84 crore from its market valuation amid controversy over alleged conflict of interest involving the lender and Videocon Group. The stock tumbled 5.93 per cent to end at Rs 261.90 on the BSE. Intra-day, it dived 7 per cent to Rs 258.90. On the NSE, the stock plunged 5.92 per cent to close at Rs 261.85.