CBI books Videocon’s Dhoot, others for Mozambique block stake deals

Our Bureau New Delhi | Updated on June 24, 2020 Published on June 24, 2020

Videocon acquired 10 per cent participating interest in the Golfinho-Atum field in the Rovuma Area 1 Offshore Block in Mozambique in 2008   -  Emmanual Yogini

Banks, Petroleum Ministry, ONGC Videsh, Oil India and Bharat Petro Resources officials under scanner

The Central Bureau of Investigation (CBI) has alleged irregularities in the acquisition of Videocon Industries Ltd’s stake in the Golfinho-Atum field in the Rovuma Area 1 Offshore Block in Mozambique. These allegations were made when the CBI filed an FIR on Tuesday, suspecting criminal conspiracy, cheating and criminal misconduct that led to ‘pecuniary gains’ to Videocon Industries.

The CBI FIR said that unknown officers of lender banks led by State Bank of India, in conspiracy with Videocon Chairman and Managing Director Venugopal Dhoot, have caused wrongful gain to Videocon and wrongful loss to Indian PSU banks.

The CBI said a preliminary enquiry was registered against unknown officials of the Ministry of Petroleum and Natural Gas, ONGC-Videsh Ltd (OVL), Oil India Ltd (OIL), Bharat Petro Resources Ltd (BPRL) and a consortium of banks (SBI, IDBI and ICICI Bank) led by SBI Cap. It is alleged that they colluded with the directors and promoters of Videocon Mozambique Rovuma 1 Limited (VMRL), a subsidiary of Videocon Hydrocarbons Holding Ltd (VHHL), with an intent to cause 'undue gains' to Videocon Industries Ltd.

Videocon acquired 10 per cent participating interest in the Golfinho-Atum field in the Rovuma Area 1 Offshore Block in Mozambique in 2008. OVL and OIL had acquired the Mozambique asset from Videocon in January 2014 for $ 2519 million, the CBI said.

The enquiry revealed that in April 2012, the consortium led by SBI sanctioned a Standby Letter of Credit facility of $2,773.60 million to Videocon Hydrocarbon Holdings. This amount was to be used for the development of their oil and gas assets in Mozambique, Brazil and Indonesia, and other funding requirements, including refinancing existing loans.

The CBI alleges that the SBI led consortium refinanced some loans of Standard Chartered Bank, London that were to be paid by Videocon. But the SBI consortium did not take charge of any oil and gas assets in return for paying off these loans.

Further, when the sale of Videocon’s stake in the Mozambique asset to the OVL-OIL-BPRL consortium took place, Standard Chartered Bank pocketed $705.45 million, instead of the $650 million that initially was agreed upon. This $650 million liability had come about because Videocon continued to take more loans from Standard Chartered Bank, despite being directed to not do so. The SBI led consortium did not flag this issue too, according to the CBI.

CBI also said that Videocon siphoned a portion of the amount borrowed from banks for developing oil and gas assets to its other businesses and promoters accounts.

Published on June 24, 2020
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