Central Bureau of Investigation (CBI) enquiry has revealed that Videocon Industries Chairman Venugopal Dhoot, in collusion with officials of State Bank of India-led consortium, allegedly sanctioned credits of hundreds of millions of US dollars with an intent to cause “undue pecuniary gain” to the consumer durable firm. Dhoot has been earlier booked by the CBI in the Videocon-ICICI bank loan case. The present matter pertains to Mozambique-based oil block for which Videocon had taken credit facility from Standard Chartered Bank in London.

The repayment was done by the consortium against the oil block acquired by Videocon. The consortium, however, did not take the charge of the assets and Videocon continued to avail the credit facility from the bank.

The CBI FIR is based on the findings of the preliminary enquiry (PE), which was opened against officials of petroleum ministry, ONGC Videsh, Bharat Petro Resources, Oil India, and consortium of banks. According to the PE, these entities colluded with directors and promoters of Videocon Mozambique Rovuma with an intent to cause unlawful gain to the parent company. However, the CBI did not accuse these entities in its FIR.

The CBI enquiry revealed that in 2008, Videocon Hydrocarbon acquired 10 per cent participating interest in an oil and gas block in Mozambique. The company was also having oil and gas assets in Indonesia and Brazil. In 2012, the bank consortium sanctioned a Standby Letter of Credit (SBLC) facility amounting to $2,773.60 million to Videocon’s subsidiary firm.

Credit facility worth $1,103 million was refinanced, which included outstanding of $400 million of Standard Chartered London. In 2013, Videocon informed the consortium that the said loan of Standard Chartered had increased to $530 million and requested the bank to make payment and in exchange take over the charge of the oil and gas assets.

“The SBI-led consortium without any verification/enquiry, approved and paid loan of $530 million to Standard Chartered,” PE noted. However, as decided, the SBI consortium did not take the charge of the assets in connivance with the Videocon with an dishonest intention, it said. Videocon’s subsidiary firm continued to avail the credit facility from Standard Chartered backed by Mozambique assets. Neither Videocon informed the lenders about the continuation of this facility nor lenders asked for submitting closure to Videocon, the CBI report said.

“The consortium never took the charge of the Mozambique assets, and the charge of Indonesia and Brazil assets were only taken in 2013 by Standard Chartered,” the CBI said. It added that ONGC Videsh and Oil India required NoCs from the lender banks before making payments for Mozambique assets.

For the sale of assets to ONGC Videsh and OIL, in November 2013, Videocon requested the consortium to pay the outstanding amount to Standard Chartered from the sale proceeds of the Mozambique asset. “The consortium in conspiracy with Videocon did not raise any objection to the fact that the outstanding at Standard Chartered London had been already paid by the consortium in February 2013. It was agreed that the outstanding at Standard Chartered London be paid and should not exceed $650 million,” the CBI said. Despite this, more than $700 million were paid to Standard Chartered, it added.