CBI Books Videocon Head Venugopal Dhoot in Another Bank Fraud Case

The Central Bureau of Investigation (CBI) on Tuesday filed a First Information Report (FIR) against Venugopal Dhoot, Chairman and Managing Director of Videocon Industries Limited (VIL) along with unknown officials of a consortium of banks led by State Bank of India and other unknown persons on charges of corruption and criminal conspiracy after conducting a preliminary enquiry based on a complaint by the Oil Ministry.

This has become the second case to be probed by the CBI against Dhoot and bankers in alleged bank fraud as the agency is probing him along with former ICICI Bank Chairman Chanda Kochhar and her husband Deepak Kochhar over alleged irregularities sanctioned by the bank to Videocon group companies in 2012.

The agency’s preliminary enquiry found that Dhoot, in a nexus with SBI, IDBI and ICICI banks, had allegedly gained millions of dollars between 2012 and 2014 pertaining to transactions between the consortium of the banks and his Cayman Island registered entity Videocon Hydrocarbons Holding (VHHL), a subsidiary of VIL.

As per the FIR, in April 2012, the consortium of banks “sanctioned the standby letter of credit of facility of USD 2773.60 million to VHHL for appraisal and development of their overseas oil and gas assets in Mozambique, Brazil and Indonesia and other funding requirements in relation to the said oil and gas asset and for refinancing the existing facilities”. Further, it revealed that the banks paid inflated amounts for VHHL’s refinancing obligations to Standard Chartered Bank, London (SCB) “without any verification and enquiry” and did not take charge of VHHL’s assets in Mozambique in spite of mutual agreement.

The FIR noted that “facts and circumstances show that unknown officers of lender banks led by SBI in conspiracy with Venugopal Dhoot allowed VHHL to continue to avail the facility from SCB London with dishonest intention by not creating the charge on Mozambique asset and thereby caused wrongful loss to the Indian PSU banks.”

In November 2013, when ONGC Videsh and Oil India were considering to acquire the Mozambique assets and needed a no-objection certificate from the lender banks, VHHL asked the banks to pay the outstanding amount of SCB London from the sale proceeds. The agency’s probe revealed that the lenders had paid USD 704.45 million to SCB against the agreed cap of USD 650 million.

Subsequently, ONGC Videsh and Oil India acquired Mozambique assets in 2014.

However, it is not clear why the Oil Ministry had taken more than six years to file a complaint with the CBI in spite of the questionable conduct of Dhoot’s VIL in the public domain.

Videocon Vs Oil Ministry

It is to be noted that the Oil Ministry and Videocon group had been in a legal spat since 2002 related to a 'Production Sharing Contract' executed between the government and ONGC, Videocon Group, Vedanta and Ravva Oil (Singapore) on October 28, 1994.

In October 2018, the ministry sent Videocon a demand notice for payment of Rs 2,245 crore based on this agreement. And subsequently, the ministry approached the company tribunals seeking the money from VIL, but NCLT and later by NCLAT rejected the plea citing provisions of IBC Code.

Presently, the insolvency of VIL entities in India is undergoing at the Mumbai bench of NCLT. A group of Banks Including SBI, Allahabad Bank, Indian Overseas Bank, Jammu & Kashmir Bank, Bank of Maharashtra, Bank of Baroda, United Bank of India and Canara Bank and other have claimed over 29,000 crore from VIL.

ICICI - Videocon Scam

In January last year, the CBI filed an FIR against Dhoot, Chanda Kochhar and her husband Deepak Kochhar for alleged financial irregularities and ownership transfers that took place between 2008 and 2013 across companies owned by Dhoot, and those owned by Deepak Kochhar.

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