ICICI Bank, Kochhar have replied to show-cause notices: Sebi

The cases under scanner include significant loan exposure of the bank to Videocon way back in 2012 and the alleged involvement of the Kochhar family in restructuring of that loan.

Markets watchdog Sebi Tuesday said, ICICI Bank and Chanda Kochhar have replied to its show-cause notices on the probe into the alleged regulatory lapses by the bank's CEO-on-indefinite-leave in lending to Videocon group and her husband's business deals with the Dhoot family.

ICICI Bank and the business dealings of the Kochhar family have come under the regulatory glare of Sebi and other agencies after a whistleblower has reported to the government agencies that the Kochhar family had some quid pro quo in its dealings with the now bankrupt Videocon group.

In FY 2012, the bank had, by allegedly flouting its own lending norms extended a Rs 3,250 crore loan to the Videocon group, which has since turned dud for the bank, which is though is not the lead lender.

Addressing the media after a board meeting in Mumbai on Tuesday evening, Tyagi, when asked about the ICICI Bank issue, said, "I think there was some reply to our show-cause notice, but I man not very sure about their consent application."

Whole Time Member Anant Barua joined the chairman saying, "Yes they (the bank and Kochhar) have replied to the show-cause notices."

But when asked whether they have formally approached Sebi with a consent request, Barua clarified that "they have not formally filed the application."

The bank denied seeking consent settlement.

"We have submitted our responses to the show cause notices issued by Sebi.

“We would like to clarify that we have not filed any application for settlement," ICICI Bank spokesperson said in a statement.

Earlier, the Securities and Exchange Board had issued show cause notices to ICICI Bank, Kochhar and others after its preliminary examination favoured initiating adjudication proceedings against them for alleged violation of listing disclosure norms regarding 'conflict of interest' in business dealings of her husband with Videocon Group.

The bank and Kochhar have been maintaining there had been no regulatory violations on their part and that she was not aware of specific business dealings of her husband.

As per Sebi's preliminary probe, Kochhar's husband Deepak has had many business dealings with the Videocon group over the past several years.

Besides, Deepak and Videocon chief Venugopal Dhoot were co-founders and promoters of NuPower, besides other associations.

The cases under scanner include significant loan exposure of the bank to Videocon way back in 2012 and the alleged involvement of the Kochhar family in restructuring of that loan.

Kochhar and her family members are also facing allegations of quid pro quo and conflict of interest with respect to the loan extended to an offshore arm of the Essar group.

Photograph: Punit Paranjpe/Reuters