Companies Act, 2013

Management of Company
Directors
 Section 2(34) of the Companies Act, 2013, defines a ‘director’ as a person
appointed to the board of a company.
 It means that the person cannot be considered as director unless he is appointed
by any method (i.e., either by the board or by shareholders) to the board of
company.
Role of Directors

 Directors refer to the part of the collective body known as the Board of Directors,
that is responsible for controlling, managing and directing the
affairs of a company.

 Directors are considered the trustees of company’s property and money, and
they also act as the agents in transactions which are entered into by them on
behalf of the company.
 Role of Directors

 Directors are expected to perform their duties and obligations as a rationally diligent person
with skill, knowledge, and experience as the person carrying out functions of a director and of
that himself.

Hence, a director plays several roles in a company, as an agent, as an employee, as an

officer and as a trustee of the company.
 Minimum and Maximum number of directors in a company

 The law requires that every company must have

 at least 3 directors in case of public limited companies,
 minimum 2 directors in case of private limited companies and
 minimum 1 director in case of one person companies.

 A company can have maximum 15 directors. The company could appoint more
directors by passing the special resolution in its general meeting.
 APPOINTMENT OF FIRST DIRECTORS

 Article of association contains the name of the first directors.

 As per Regulation 60 of Table F of Companies Act, 2013, the names of first directors are
determined in writing by subscribers to the memorandum or their majority.

 Where the articles do not contain the names of the first directors, the subscribers to
the memorandum, who are individuals, shall be the first directors of the company.
Types of Directors

I. Residential Director

 As per the law, every company needs to appoint a director who has been in India
and stayed for not less than 182 days in a previous calendar year.
II. Independent Director

 Independent directors are non-executive directors of a company and help the

company to improve corporate credibility and enhance the governance
standards.

 In other words, an independent director is a non-executive director without a

relationship with a company which might influence the independence of his
judgment.
 Tenure of Independent Directors and Numbers

 The tenure of the Independent directors the hall up to 5 consecutive years; however, they shall be
entitled to reappointment by passing a special resolution with the disclosure in the Board’s report.
Following companies need to appoint at the least two independent directors:

 Public Companies with Paid-up Capital of INR 10 Crores or more,

 Public Companies with Turnover of INR 100 Crores or more,
 Public Companies with total outstanding loans, deposits, and debenture of INR 50 Crores or more.
 III. Women Director

 A company, whether be it a private company or a public company, would be required to appoint

minimum one woman director in case it satisfies any of the following criteria:

 The company is a listed company and its securities are listed on the stock exchange.
 The paid-up capital of such company is INR 100 crore or more with a turnover of INR 300 crores
or more.
 IV. Additional Director

 The Board of Directors of a Company, if authorized by the Articles of Association, may appoint an
additional director.

 Term for Additional Director

A person appointed as an additional director can occupy their post until the date of the next Annual
General Meeting.
 Powers and Obligations
same powers as a director
Number of Additional Directors

 The number of directors and additional directors taken together shouldn’t

exceed the number specified in the Articles of Association.

 For example, if the Articles of Association of a company permits the

appointment of 11 directors in total, and the company currently houses 5 full-
time directors, the Board of Directors may appoint 6 additional directors.
Method of Appointment

 The additional director may be appointed in a meeting of the Board, which may
be held physically or through video conferencing or other audiovisual means.
Additional Director as a Managing Director

 The Board of Directors may appoint an additional director as the company’s

managing director.
V. Alternate Director

 Alternate director refers to a personnel appointed by the Board, to fill in for a

director who might be absent from the country, for more than 3 months.
SMALL SHAREHOLDERS’ DIRECTORS

 ‘Small shareholder’ means a shareholder (including a preference shareholder)

holding shares of nominal value of twenty thousand rupees or less in a public
listed company.

 Equity or preference shareholder who is satisfying the above requirement will be

considered as small shareholder.
 The Ministry of Company Affairs, in this regard, has prescribed the Companies (Appointment
and qualification of Directors) Rules, 2014.

 Every listed company may have one director elected by small shareholders.

 The company may appoint a small shareholder on its own or on application by the small
shareholder.
 Procedure for appointment

 1. The company may appoint a small shareholder director (SSD) if notice in writing is given by at least
1000 small shareholders or 1/10th of small shareholders, whichever is less.
 2. Notice should be given at least 14 days before the general meeting. Notice should contain the
name, address and the number of shares held by the person proposed to be appointed as small
shareholders’ director.
 3. Notice should be accompanied by a statement signed by the person whose name is proposed for
post of small directors stating: 1. his director identification number (DIN)
 2. that he is not disqualified to become director.
 3. his consent to act as director to the company.
 4. If the proposer does not hold any shares in the company, the details of shares
held and folio number need not be specified in the notice.
 5. Listed public companies shall elect the small shareholders’ nominee through a
postal ballot.
 6. Small shareholders’ director can be appointed for maximum of 3 years and he
need not retire by rotation. The person can be elected for another period of 3
years on expiry of his tenure. He cannot be reappointed more than once.
 7. A person shall not hold office as small shareholders’ director in more than two companies at
same time.
 8. A person who is small shareholders’ director in one company cannot be appointed as small
shareholders’ director in a second company if it is in competition business or in conflict with the
business of the first company.
 9. Small shareholders’ director shall directly or indirectly not be appointed or associated in any
other capacity with the company for a period of 3 years from the date of his cessation as a small
shareholders’ director.
REMOVAL OF DIRECTOR BY SHAREHOLDER

 Section 169 empowers shareholders to move proposal for removal of director. To

remove a director, it is not necessary to prove any kind of breach of trust or
misconduct on part of the director.
 Article of association cannot take away the right of shareholders to remove
directors. Right to remove director is a statutory right of shareholders.
 To remove a director under Section 169, an ordinary resolution should be passed
at the general meeting.
 The directors appointed by the tribunal under Section 242 of Companies Act,
2013, cannot be removed by the shareholders in a general meeting.
 POWER OF BOARD OF DIRECTORS

 Companies Act, 2013, provides for general powers of the board of directors.
 The board of directors of a company shall be entitled to exercise all such
powers, and to do all such acts and things, as the company is authorized to
exercise and do.
 Shareholders, by amending the articles, may restrict the powers of the board.
 However, such amendment cannot be made retrospectively and a meeting
of shareholders cannot therefore invalidate any act validly done by the board.
Exception

 Directors Acting Mala Fide

 Directors Themselves Wrong Doers
 Incompetency of the Board
 RELATED PARTY TRANSACTION
 Liabilities of a director

 The liability of a director arises because of his position as officers or agents of the Company and
also for being the trustees and having a fiduciary relationship with Company and its shareholders.

 Since a company and its Director are two separate entities, a Director does not have
personal liabilities on behalf of a company.

 Though, under certain scenarios (mentioned below), a Director might be held liable:
1. Liability for Tax

 Under the Indian Income Tax Act, where there’s tax due from any private
company with respect to an income of any previous year which isn’t recovered
from the private company, every director of such company during the relevant
previous financial year is liable, severally and jointly, for payment of such tax.
 2. Misstatement in company’s prospectus

Civil liability could be imposed on the directors for any false statement in company’s prospectus if
he was the Director while issuing of the prospectus, unless:

 The director proves that he withdrew his consent before prospectus was issued, or
 That the prospectus was issued without his consent or authority or without his knowledge, or
 That, once he became aware of the false statement, he withdrew his consent and gave a public
notice of the same, or
 He proves that he believed the doubted statements to be true.
 3. Debts of the Company- Usually, a director isn’t liable personally for any of the debt of a
company until and unless fraud on part of Director could be established.

 4. Fraudulent Business Conduct: A Director might be held liable personally, for debts or
other liabilities of a company in case he was knowingly a party to the fraud(s) while carrying
on the business.
 5. Share application money refund: Directors of a company are personally liable together
with the company for repaying the share application money or the surplus share
application money received if it is not repaid within the specified time period.
 The lifting of the corporate veil

 The lifting of corporate veil refers to disregarding corporate personality and looking at the individuals
(directors) who are controlling the company.

 In simple words, where a legal entity is used for dishonest and fraudulent purposes, the persons
concerned cannot take shelter under the cloak of corporate personality.

 The court would break through this corporate veil.

 Once this corporate veil is lifted, it’s permitted to show that individuals hiding behind the company
are liable for discharging their obligations disregarding the concept of the company as a legal entity.
APPOINTMENT OF DIRECTORS

 Appointment of first directors – By Article Of Association

 Appointment at general meeting - Directors of a public company must be
appointed in a general meeting.
 Appointment by the board of directors
 Appointment by third parties
 Appointment by central government
What is share qualification of directors?

 The Articles of Association of a Company may require the Directors of that

Company to hold some minimum shares at the time of his Appointment within
such time limit as prescribed under Section 270 of the Companies Act, 1956; this
holding of minimum shares is known as 'Share Qualification of Directors'.
WHO IS AN IDEPENDENT DIRECTOR?—SECTION 149(6)

 An independent director is someone who does not have any material or

pecuniary relationship with the company or directors.

 The managing director or whole-time director of the company cannot be

considered as independent director.
 1. Such individuals must possess integrity and relevant industrial expertise;
 2. Such individuals must not have any material or pecuniary relationship with the company or its
subsidiaries;
 3. They or their relatives should not have had any pecuniary relationship with the company or its
subsidiaries, amounting to 2% or more of its gross turnover or total income or ₹ 5 lakh, whichever is
less, during the two immediately preceding financial years or in the current financial year;
 4. Such appointees or their relatives should not have any key managerial position in the company or
its subsidiary companies during any of the three preceding financial years;
 5. Such persons or their relatives should not have been an employee of the company or its
subsidiary companies during any of the three preceding financial years;
 6. They or their relatives must not be a chief executive or director of a non-profit organisation
which receives 25% or more of its receipts from the company or its subsidiary companies or its
promoters or directors or from anyone who holds 2% of voting rights in such companies;
 7. Such individuals must not be a promoter of the company or its subsidiaries;
 8. They must not hold more than 2% voting rights in the company either by themselves or together
with their relatives.
 Tenure

 The tenure of the independent directors must not exceed two consecutive periods of 5 years
each, and can be extended for a second term only after the board passes a special resolution
and discloses such appointment in the board’s report.
 Section 149(11) mandates that reappointment after the expiry of second term can be done
only after a cooling period of 3 years.
 During the cooling-off period of 3 years, independent directors cannot be appointed in or be
associated with the company in any other capacity, either directly or indirectly.
Remuneration

 The Act expressly disallows independent directors from obtaining stock options
and remuneration other than sitting fees and reimbursement of travel expenses
for attending the board and other meetings.
 Profit-related commission may be paid to them, but subject to the approval of
the shareholders.
 NUMBER OF DIRECTORSHIP—SECTION 165

 A person cannot hold office at the same time as a director in more than 20 companies.
 Further, a person cannot hold directorship at the same time in more than 10 public companies and
a private company which is a subsidiary of a public company.
 While counting 20 directorships of a person, alternate directorship is included.
 The members of a company may, by special resolution, specify any lesser number of companies in
which a director of the company may act as director.
DIRECTOR IDENTIFICATION NUMBER—SECTION 153–159 AND
RULE 9

 Every individual, who is to be appointed as director of a company shall make

obtained a director identification number (DIN).
 Person cannot hold more than one DIN. Every person or company is required to
quote the DIN in such return, forms or particulars relating to the director while
filing forms.
 Go to the links below:

 https://www.wipro.com/en-IN/leadership/#ExecutiveCommittee

 https://www.entrepreneur.com/article/319835

 https://www.entrepreneur.com/article/314797

 https://www.entrepreneur.com/video/304115

 https://www.entrepreneur.com/video/299795

 https://timesofindia.indiatimes.com/topic/Board-of-Directors
Can directors hold shares of company?

 Shareholders and directors have two completely different roles in a company.

The shareholders (also called members) own the company by owning its shares
and the directors manage it.

 Unless the articles say so (and most do not) a director does not need to be a
shareholder and a shareholder has no right to be a director.
Is it mandatory for directors to hold shares?

 A director of public company is also not required to hold qualification share

unless required by articles u/s 270. ... However, the Articles of a Private Company
may provide that the directors are required to obtain shares as qualification
shares.
Are directors employees?

 A directorship is an office, not necessarily an employment. If, however, the

company enters into a service contract with the director, the terms of which
make the director an employee under the usual common law test, then the
director becomes an employee. Many company directors are in this position.

 Is a director an employee for tax purposes?

 As a company director, you are classed as an employee for tax purposes, so you
will have to register your company as an employer and operate PAYE as part of
your payroll. You will be required to pay Income Tax and Class 1 National
Insurance through PAYE on the wages you receive from the company.
 Shareholders and directors have two completely different roles in a company.
The shareholders (also called members) own the company by owning its shares
and the directors manage it. Unless the articles say so (and most do not) a
director does not need to be a shareholder and a shareholder has no right to be
a director.
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ICICI Bank CEO Chanda Kochhar and other
members of her family had invested in a
previously unheard of firm called
Credential Finance Ltd at a time when
Venugopal Dhoot's Videocon International
Ltd had held a 17.74 per cent stake in it.

ICICI-Vediocon case
 What’s the issue?

 Kochhar and her family members facing allegations of quid pro quo and conflict of interest with
respect to a loan extended to certain entities, including the Videocon group.

 Multiple agencies, including the CBI and regulator Sebi, are already probing the alleged lapses
involving Kochhar and her family members.

 “Kochhar has decided to go on leave till completion of the enquiry as announced on May 30. The
board has noted and accepted this.
 Is there a conflict of interest?

 An Indian Express report claims, the question of conflict of interest comes as the transfer of the
company to Deepak Kochhar happened six months after the Videocon got the lead of Rs 3,250
crore from ICICI bank with 86% of that loan is still unpaid and in 2017, the Videocon account was
declared a non-performing asset.
 Complicated Controversy

 Kochhar, a career ICICI Group employee has been under the cloud since late March, when allegations
of conflicts of interest and possible quid pro quo in lending to Videocon group, along with lack of
disclosures by the bank, made headlines.

 Following reports of allegations based on an activist’s complaint, the bank board earlier had come
out strongly in support of her.

 Complicating the matters for her, the bank received another complaint against Kochhar by an internal
whistle-blower, who made allegations of not following the bank’s code of conduct, late May.
 Initiating the external probe by board…..

 This led the board to announce a detailed probe by an external expert into the allegations.

 Retired Supreme Court judge B N Srikrishna would be heading the probe panel.

 According to sources, he has accepted the request from the bank and the terms of reference for
the panel are to be decided by the audit and governance committee of the bank.
 While the contents of the whistle-blower’s complaint are not known, the first set of allegations
against Kochhar pertains to alleged impropriety while lending to the cash-strapped Videocon Group
and companies associated with the Ruia family, the promoters of beleaguered Essar Group.
However, the statement from the bank did not have any mention of it.

 The cases under scanner include the bank extending Rs 3,250 crore to Videocon Group in 2012 and
the involvement of Chanda Kochhar’s family members, including her husband Deepak Kochhar, in
first sanctioning the loan and then restructuring the same through Avista Advisory, a company run
by his younger brother Rajiv Kochhar.
 There are also allegations that NuPower — a company floated by Videocon group
and Deepak — got investments of Rs 325 crore from the Mauritius-based
Firstland Holdings, a firm owned by Nishant Kanodia, the son-in-law of Essar
Group co-founder Ravi Ruia.
 Kochhar impact on ICICI

 Kochhar is credited for consolidating the operations of the bank after the departure of K V Kamath.
The bank, with roots in development finance, has also seen a massive rise in its sour assets,
courtesy mainly on exposure to the infrastructure sector, along with its peers, which led to a
massive drop in profit in recent quarters.

 Selling off stakes in group companies — it listed the life general insurance arms as well as
brokerage businesses in quick succession — gave it the wherewithal to withstand the high
provisioning required recently.
 The Matrix Group and its holding entity Firstland Holdings are based out of
Mauritius. Kanodia is the son-inlaw of Ravi Ruia, vice-chairman of the Essar
Group, which a whistle-blower had accused of using Matrix and Firstland to
round-trip investments into NuPower Renewables, owned by Chanda Kochhar’s
husband Deepak.

Avista Advisory, run by Deepak Koch-har’s bother Rajiv, had the mandate to
restructure foreign currency-denominated debt deals worth more than $1.7
billion of seven companies over the past six years. All these companies were
borrowers of ICICI Bank at the same time, sources in the know told ET.
 “On Saturday, based on the raids carried out on Friday and the evidences seized,
Deepak and Dhoot were confronted. This was done to verify and cross-check the
claims made by them in their statements which have been recorded under
certain provisions of the Prevention of Money Laundering Act,” said an ED
official.
 The ED, which probes money laundering, filed the case based on an FIR
registered by the CBI.
 The CBI case pertains to six loans totalling Rs 1,875 crore sanctioned to
Videocon’s group companies between June 2009 and October 2011, after
Chanda Kochhar took over as the managing director of ICICI Bank (May 2009) and
was one of the members of the committee that cleared the proposals. She is
being probed for receiving alleged “illegal gratification through her husband,
Deepak Kochhar, from Videocon M ..
 While the CBI, too, has questioned Dhoot, the Kochhar brothers and Pugali last
year, the ED is probably the first agency to question the former ICICI Bank chief
and Kanodia.

 All of them are also being probed by the income tax department for alleged tax
evasion “Our probe is not only limited to funds that were received by NuPower
Renewables, from firms related to the Videocon group but also other firms which
have received loan from ICICI at the time when Chanda was at the helm. Many of
these comp ..
 “We are trying to unearth how these loans were actually kickbacks received in
lieu of the loans sanctioned by the bank and used to create private assets by the
accused couple.”

In May last year, Arvind Gupta, the shareholder activist who raised the red flag
on questionable deals between the Videocon group and NuPower, complained to
the Prime Minister’s Office about an alleged round-tripped of Rs 453 crore of
investments from the Essar Group, routed through the Matrix Group and
Firstland ..
 Kochhar was born in Jodhpur, Rajasthan in 1961 where she spent most of her early years.
 Kochhar joined Jai Hind College in Mumbai for a Bachelors Degree in Arts.
 After graduating in 1982, she studied cost accountancy from Institute of Cost Accountants of India.
 She did her Masters in Management Studies from the Jamnalal Bajaj Institute of Management
Studies, Mumbai.
 She topped her batch and received the Wockhardt Gold Medal for Excellence in Management
Studies.
 In Cost Accountancy she received the JN Bose Gold Medal for highest marks in that year.
 Kochhar joined the erstwhile ICICI Limited in 1984 as a management trainee.
 In the initial years, she handled the basic core function in ICICI at that time, i.e. Project Appraisal
and Monitoring.
 She handled projects in various industries like Petrochemicals, Textile, Paper and Cement.

 In 1993, when the company decided to venture into the commercial banking sector, Kochhar was
deputed with ICICI Bank.
 She was promoted to Assistant General Manager in 1994 and then Deputy General Manager in
1996.
 In 1998, ICICI created a Major Client Group to handle the relationships with the top 200 clients of
ICICI.
 She was promoted as the General Manager and was made the head of the Major Clients Group.
 In the year 1999, she simultaneously started handling the Strategy and e-commerce divisions of
ICICI.

 In July 2000, under the leadership of Kochhar, ICICI Bank entered the retail business and within a
short span of around 5 years, the Bank emerged as one of the largest retail financer in India.
 In April 2001, she took over as Executive Director, heading the retail business in ICICI Bank.
 In April 2006, she was appointed as Deputy Managing Director of ICICI Bank, with responsibility
for both Corporate and Retail banking business of ICICI Bank and from October 2006 to October
2007, she was handling the International and Corporate businesses of ICICI Bank.
 She was elevated as the Managing Director & CEO of ICICI Bank in 2009.
 Kochhar is currently a member of various boards which include the Indian Banks Association, IIIT
Vadodara, National Institute of Securities Markets and Institute of International Finance.
 She is also a member of the Prime Minister’s Council on Trade & Industry, the Board of Trade and
High-Level Committee on Financing Infrastructure.
 Kochhar, though currently in the news for the wrong reasons, has won many prestigious awards in her
illustrious career which include Padma Bhushan.

 She has also been ranked as most powerful women and professional by multiple publications which include
Forbes, Fortune, CNBC TV18, etc.
 After the CBI probe started last year, Kochhar sought an early retirement and the bank accepted her
resignation. Immediately after the Justice Srikrishna committee report, the bank sacked Kochhar and took
away many benefits due to her.
 On January 30, a panel headed by Justice BN Srikrishna indicted former MD and CEO Chanda Kochhar for
violating the bank's code of conduct in the Videocon loan case.
 Following the report, the bank's board said it will treat her separation as 'termination for cause' under their
internal policies.
 Reaction…

 Chanda Kochhar said she is "disappointed, hurt and shocked" by ICICI Bank's decision to treat her resignation
as a "termination for cause".

 Kochhar said she served the ICICI group for 34 long years "with all my dedication and hard work" and the
bank's latest decision has caused her "immense hurt and pain".

 Following the Srikrishna panel report, the bank said it would not treat her leaving the bank as retirement but
a termination of her service and also decided to claw back the around Rs 10 crore bonus paid to her between
2009 and March 2018 along with blocking her close to Rs 340 crore of Esops- both a first in the country.
 She is reportedly planning a legal challenge to both punitive actions.
 What did Justice Srikrishna probe?

 The Justice Srikrishna committee dwelled on whether Kochhar violated the code of
conduct by not recusing herself in case of the Videocon loan and whether she made
required disclosures related to her husband's and brother-in-law's businesses.

 After allegations by whistleblowers about a quid pro quo between Videocon, which got a
hefty loan from the ICICI Bank, and Kochhar whose husband Deepak Kochhar got money
from Videocon, the bank made an internal inquiry and defended Kochhar.
 MK Sharma, then ICICI Bank chairman, said that the board did not see any conflict of interest
since the Videocon group was not an investor in Kochhar's husband's company and, therefore,
there was no need for Kochhar to recuse herself from the committee that sanctioned the loan
to Videocon.
 He said the committee had many independent directors and was not chaired by her.

 He also said that the loan disbursed to Videocon was part of a consortium arrangement.
 However, when the issue did not die down, the bank agreed to institute an
independent probe by Justice Srikrishna who has now found that Kochhar indeed
violated the code of conduct, by not recusing herself from the committee that
sanctioned loan to Videocon and not making necessary disclosures required
under the company code.
 It all began with this company

 Kochhar, whose company NuPower Renewables allegedly received an investment from a

Videocon group company as a quid pro quo for a loan from the bank.
 Dhoot allegedly invested crores of rupees in Nupower months after the Videocon group got
Rs 3,250 crore as loan from the ICICI Bank in 2012.
 How it came to light

 The Videocon loan issue was first raised by whistle-blower Arvind Gupta in 2016 when he wrote
about it on a blog.
 He accused Chanda Kochhar of conflict of interest and corporate misconduct while sanctioning loans
to Videocon.

 Gupta wrote to the Prime Minister, the RBI governor and several other authorities demanding a
probe but.
 However, his complaint drew no response from the authorities.
 The issue came to the limelight when early last year when a newspaper published an investigation of
Gupta's allegations.
 How the money changed hands

 Whistle-blower Gupta alleged that a company owned by Dhoot loaned Rs 64 crore in March 2010 to NuPower
Renewables that he and Deepak Kochhar had jointly promoted just two years ago.

 A complex web of deals resulted in a trust controlled by Deepak Kochhar acquiring the lending company six
months after the Videocon Group got the loan from ICICI Bank.
 The transfer of company shares to Kochhar’s trust was made at Rs 9 lakh.
 A company that loaned an amount as big as Rs 64 crore, was acquired by the trust Deepak Kochhar controlled
for as small an amount as Rs 9 lakh. This was the part that raised the eyebrows.
 Dhoot also sold his 50 per cent stake in NuPower Renewables for just Rs 2.5 lakh to Deepak Kochhar.
 Gupta alleged that ICICI Bank awarding the loan to Videocon and the loan later becoming an NPA in 2017 were
due to Dhoot's business relations with Deepak Kochhar whose wife, Chanda, was part of the commi ..
 The brother-in-law angle

 It also came to light that ICICI Bank borrowers, including Jaiprakash Associates and Jaiprakash Power,
had hired services allegedly of a firm, Avista Advisory Group, run by Chanda Kochhar's brother-in-law
Rajiv Kochhar (brother of Deepak Kochhar).
 Among the companies that are said to have hired services of Avista for the restructuring of debt were
Videocon, GTL Infrastructure and Suzlon. ICICI Bank was a lender to all these entities.
 However, the bank denied that it had ever engaged Avista Advisory Group for any services. Earlier, the
bank said that the brother of a husband did not fall within the definition of a “relative” under the
Companies Act and, therefore, there was no requirement for making any disclosure of such a
relationship.
 The property angle

 Chanda Kochhar's house too has come under the lens.

 The Income Tax department has probed the acquisition of the current family residence of
Kochhar in South Mumbai by her husband Deepak Kochhar in a complex transaction involving
firms linked to Videocon Group, The Indian Express reported in June last year.
 The house was bought through Credential Finance Ltd, a financial services firm set up by Deepak
Kochhar and his brother Rajiv Kochhar in the mid-1990s.
 The company had intricate relations with the Videocon group, the report said.
 Sale of ICICI bank building

 The Income Tax department also probed a 2010 real estate transaction between ICICI Bank and
Videocon Group as part of its investigation into possible tax evasion in the ICICI Bank-Videocon loan
case, The Indian Express reported last year.
 The sale of a 13-storey building, Radhika Apartments, which was earlier the staff quarters of ICICI
Bank, in Prabhadevi in central Mumbai, to Videocon Industries came under the scanner following
allegations of possible quid pro quo.
 It was allegedly sold to Dhoot’s firm at a much lower price than the existing market rate at that time.
 Mauritius connection of NuPower

 Whistle-blower Gupta has also alleged that NuPower received what he described as round-tripped
investments of Rs 453 crore from Essar Group, routed through an organisation called Matix Group and its
holding entity Firstland Holdings Ltd, both based in Mauritius.
 These firms are owned by Nishant Kanodia, husband of Smiti Ruia, who is the daughter of Essar Group vice-
chairman Ravi Ruia.
 ICICI Bank is a key lender to Essar Group and during the same period, it lent to Essar’s now-bankrupt US steel
project in Minnesota and its UK refinery project at Stanlow.
 However, The allegations have been dismissed as motivated by the Essar Group, which maintains it has no
business interest in Firstland Holdings.
 Inflated profits

 A whistle-blower complaint accused Kochhar of irregularities in 31 loan accounts. It was alleged that
ICICI Bank inflated profits by at least $1.3 billion over eight years by delaying provisioning for 31 non-
performing assets (NPA) accounts.
 The whistle-blower alleged that the bank delayed provisioning for NPAs from loans worth at least $3
billion.
 The whistle-blower claimed that the bank would have reported losses in some quarters over the
eight years, had the bank’s management not deferred impairment of loans.

ET reported in December last year that ICICI Bank was close to appointing a forensic auditor to probe
these allegations. The inquiry will reveal if profits were inflated and what role Kochhar played in it.
ED tracks money trail: Videocon to Chanda Kochhar
husband’s firm

 The amount was part of the Rs 40,000-crore loan that Videocon Group secured from a
consortium of 20 banks led by SBI.
 Almost 86 per cent of the Rs 3,250 crore loan (Rs 2,810 crore) remained unpaid. The
Videocon account was declared an NPA in 2017.
 The ongoing Enforcement Directorate (ED) investigation into transactions between Videocon
Group and Deepak Kochhar’s NuPower Renewables Pvt Ltd, has unearthed a money trail that
allegedly shows diversion of loan funds by Videocon International Electronics Ltd (VIEL), in a
transaction involving transfer of Rs 64 crore to NuPower Renewables.

 This was done a day after ICICI Bank disbursed a Rs 280-crore rupee term loan to Venugopal
Dhoot-promoted VIEL on September 7, 2009.
 Deepak Kochhar is the husband of former ICICI Bank managing director and chief executive
officer Chanda Kochhar.
 Chanda Kochhar was on the sanctioning committee that cleared the Rs 280-crore loan.
 Transactions of VIEL, sources said, show that the firm transferred Rs 64 crore of the disbursed
loan received by it on September 7, 2009, to two different bank accounts of VIEL.
 A day later, on September 8, 2009, VIEL transferred the money to NuPower Renewables through
Supreme Energy Pvt Ltd.
 The Enforcement Directorate claimed to have established a money trail pointing towards quid pro
quo between the Kochhars and Venugopal Dhoot, promoter of Videocon.

 Deepka Kochhar's NuPower Renewables received Rs 64 crore through a cluster of shell companies
from Videocon. The same year it received Rs 325 crore from Mauritius-based Firstland Holdings, a
firm owned by Nishant Kanodia.

 "It is important to note that, both these companies which invested in the company of Deepak
Kochhar were sanctioned loan by ICICI Bank at a time when his wife Chanda Kochhar was at top
position in bank. It does raise suspicion
 During Chanda Kochhar's tenure as CEO, six high-value loans were issued to
various Videocon companies.

 It is alleged that Venugopal Dhoot in turn invested in Deepak Kochhar's NuPower

through his firm Supreme Energy.
 According to the CBI FIR, total loans of Rs 1,575 crore that were given by ICICI
Bank to the Videocon group had turned NPAs.
 ICICI-Videocon case: MCA finds violations by Deepak Kochhar,
Venugopal Dhoot

 The corporate affairs ministry has found at 25 violations of the Companies Act by NuPower
Renewables, Videocon Industries
 Former ICICI Bank CEO Chanda Kochhar was part of a panel that sanctioned loans to Videocon, which
in turn gave funds to NuPower.
 The ministry of corporate affairs (MCA) has discovered at least 25 violations of the Companies Act by
NuPower Renewables Ltd and Videocon Industries Ltd, the companies at the heart of the
controversial ICICI Bank-Videocon loan case, two people aware of the matter said.
 The report prepared by MCA’s Mumbai regional director will be submitted to the
union finance ministry this week.

 The alleged breaches, however, do not pertain to transactions where charges of

conflict of interest and quid pro quo have been levelled.

 On 30 January, the board of ICICI Bank fired Kochhar and asked her to return
bonus payments since 2009, after an internal inquiry charged her with violating
the bank’s code of conduct.
 Violations

 The violations against NuPower Renewables, the company owned by Deepak Kochhar, and
Videocon Industries include irregularities in appointment of directors, some of whom the
corporate affairs ministry suspects to be shadow directors," the second person cited earlier said,
referring to directors who exist only on paper.
 Other violations by Videocon and NuPower, the second person said, include false disclosures
about board meetings and inadequate or misleading disclosures in annual reports and financial
statements.
 “NuPower and Videocon were also found to be irregular with their board meetings and issuing
shares to directors beyond prescribed limits. Loans were also extended to the directors of
Videocon beyond prescribed limits," this person added.
 Under the Companies Act, such violations attract fines, removal from
directorship and a jail term for repeat offences.
 MCA is the third agency probing alleged lapses in ICICI Bank loans to Videocon.
 The Central Bureau of Investigation (CBI) registered a case of misuse of public
office and cheating against the Kochhars and Dhoot on 22 February 2018. The
alleged lapses occurred in sanctioning of ₹1,875 crore loans by ICICI Bank.
 Out of this loan sanctioned in 2012, an amount of ₹300 crore, according to CBI,
was given as part of a quid pro quo arrangement.

 The Srikrishna committee that was tasked to probe the quid-pro-quo transactions
in ICICI Bank submitted its report, saying that Chanda Kochhar violated the banks
code of conduct. The panel suggested to treat her separation from ICICI Bank as
termination for cause.