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Arvind Gupta, trustee, Indian Investors Protection Council, and the original whistleblower who had raised concerns over loans given by ICICI Bank to Videocon Group, has written another letter to Prime Minister Narendra Modi, seeking a government probe into fresh allegations against ICICI Bank MD and CEO Chanda Kochhar.

Highlighting the nexus between promoters and bankers, Gupta, in his second letter, has alleged “murky” corporate dealings of Essar Group of companies, led by Shashi Ruia and Ravi Ruia through their son-in-law and nephew, for round-tripping of funds through Mauritius in NuPower Renewables, which is owned by Deepak Kochhar, husband of Chanda Kochhar.

“Punishing corrupt bankers will go a long way in restoring the faith of small savers and investors in the banking system,” he wrote in the letter last month, seeking an independent investigation by the government or regulator to identify the guilty.

Gupta, in March this year, had written to the Prime Minister alleging corporate misconduct and quid pro quo deals against Kochhar, her husband Deepak Kochhar and his company NuPower Renewables, and a ₹3,250-crore loan given to the Videocon Group in 2012.

Since then, the Central Bureau of Investigation, the Income Tax Department and market regulator SEBI have begun investigations. The ICICI Bank Board, which has staunchly backed Chanda Kochhar, has also now initiated an internal probe into allegations by the whistleblower against Kochhar.

Now, in his second letter, Gupta has alleged that Essar Global Group has directly funded NuPower Group through Nishant Kanodia and Anirudh Bhuwalka. Kanodia is the son-in-law of Ravi Ruia, and is alleged to have invested in NuPower through Firstland Holdings, Mauritius, which is the holding company of his Matix Group.

According to Gupta, Matix Group front-ended Firstland Holdings, Mauritius, for investing ₹325 crore in the NuPower Group. Meanwhile, ICICI Bank acted as lead banker of a consortium lending $530 million to Essar Steel, Minnesota, in December 2010; ICICI Bank UK also funded Essar Oil with $350 million for acquiring Stanlow refinery. Gupta, in his letter, has alleged that the transactions, carried out between 2010 and 2012, cover the period when “Essar Global obtained sweetheart deals from ICICI Bank’s overseas branches in Singapore, UK, and New York to acquire Essar Steel, Minnesota, USA and Algoma Steel, Canada”.

However, ICICI Bank, Matix Group and Essar Group denied the allegations.

ICICI Bank response

When contacted, an ICICI Bank spokesperson said that while sanctioning all these loans, all the internal processes of credit risk rating, credit appraisal and credit approval were duly followed within the bank. “Hence, it will be totally inappropriate and misleading to attribute any wrong motives to ICICI Bank for these loans,” he said.

While the bank typically does not respond to client-specific queries, the spokesperson said: “All facilities that were availed by Essar Oil UK from ICICI Bank have been completely repaid. Please note that the loan figure mentioned in your email is grossly overstated.”

The bank also said that a a consortium of seven Indian banks, including ICICI Bank, had sanctioned loans to Essar Steel Minnesota. “Also, large US funds gave loans to the company. Out of the total debt of the company of $1.02 billion, ICICI Bank’s share was less than 25 per cent. The figure of $530 million loan mentioned in your email is wrong and grossly overstated. Due to various factors, the loan facilities provided to this project were classified as nonperforming by all lenders.,” it said, adding that the resolution process pursuant to the same is under process.

Essar reply

Meanwhile, an Essar spokesperson said it does not have any business interest in Firstland Holdings

“A letter by one Arvind Gupta has made certain libelous accusations against Essar. We strongly condemn these allegations, which are clearly motivated. Essar does not have any business interest in Firstland Holdings Ltd. Moreover, as we understand, AMW Motors Limited Mumbai has not made the investment of ₹197 crore in Nupower,contrary to the claims made in the letter,” he said, adding that Essar has been dealing with ICICI since 1980. “All transactions with them have been made in a very open and transparent manner, and in accordance with all applicable laws of the land,” he added.

Matix response

“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.,” said a Matix Group spokesperson.

Kochhar on leave

Kochhar has, meanwhile, gone on her annual leave. Countering a media report that Kocchar was asked to go one leave, ICICI Bank said: “The ICICI Bank board denies having asked Chanda Kochhar to go on leave. She is on her annual leave which was planned in advance,” an ICICI Bank spokesperson said on Friday, adding that the board has not appointed any search committee to find a successor.