When you cut a corner to get to the front of the line, question is what do you do when you get there? What is the event horizon and are you availing pecuniary benefit from it? The Chanda Kochhar-Advani family (Chanda Kochhar before marriage to Deepak Kochhar was 'Advani') enterprise in complicity with Videocon's Venugopal Dhoot is a result of a shameful abuse of power and pelf. An unholy trinity involved in chicanery and deceit. It is built on an edifice of greed and naked avarice.
IANS has followed the paper trail to bring forth an investigative series on the construct of this fraudulent boilerplate, one that is under a multi-disciplinary probe now.
Pacific Capital Services Pvt Ltd is under inspection and a separate report is ready for submission by government agencies. In parallel, NuPower is also under inspection by another investigating officer in the Office of the Ministry of Corporate Affairs Regional Director western region, Mumbai. Ditto with Videocon International under probe by a separate I.O.
It provides a peep into the nexus between the Kochhar/Advani families and the Videocon Group. The seamless intertwining of the two entities and virtual convergence each time shows clear mala fide across the deal board. At the time of incorporation of NuPower i.e. on 24.12.2008, Pacific was owned 90 per cent by Neelam Advani (wife of Mahesh Advani who is Chanda Kochhar's brother) while 10 per cent of the equity was held by Virender Kochhar (Deepak Kochhar's father).
Also read | Former ICICI Bank CEO Chanda Kochhar, husband arrested for loan fraud
Thus in effect NuPower was promoted by Venugopal Dhoot and Kochhar Group almost equally (Deepak Kochhar had one share more than V.N. Dhoot and his associates. The emergent story of cronyism and collusion is a veritable house of horrors, for the blatant and open abuse of power is visible. On December 24, 2008, Dhoot along with associates and nominees, Deepak Kochhar and an entity called Pacific Capital promoted and incorporated a company NuPower Renewables Ltd with a subscribed capital of Rs 500,000 (divided into equity shares of Rs 10 each). Pacific subscribed to 25,000 shares (50 per cent), Dhoot subscribed to 24,996 shares, his associates to 3 shares and Deepak Kochhar subscribed to one equity share. The directors were Dhoot, Deepak Kochhar and Saurabh Dhoot (Venugopal Dhoot's son).
Government sources indicate that on January 7, 2009, NuPower increased authorised share capital from Rs 500,000 divided into 50,000 equity shares of Rs 10 each to Rs 4,50,00,000 divided into 44,50,000 equity shares of Rs 10 each. The same day, the game was afoot as NuPower issued 19,97,500 share warrants of the company to Deepak Kochhar. The 19,97,500 warrants issued to Kochhar were convertible at any time during the period commencing from the date of the issue of warrants up to and including 31.7.2010 into equivalent number of equity shares of the company at face value of Rs 10 each at par value.
But in reality in what was a sweetheart deal, he was paid only Re 1 per warrant totalling Rs 19,97,500 only as per financial statement as at 31.3.2010.
Here is the sequence of events that follows, the expediency and alacrity shown by the dramatis personae is mysterious. The transaction results in Rs 64 crore received from Videocon International by Supreme Energy transferred to NuPower Renewables for subscription of zero coupon fully convertible debentures. Before this NuPower becomes subsidiary of Supreme and Videocon advances Rs 64 to Supreme Energy owned by Venugopal Dhoot in 2010 which is then converted into equity between 2015 and 2017.
* January 7, 2009: Board of NuPower resolved to acquire 'Wind Power Business Divisions' of Shriram City Union Finance Limited and Shriram Transport Finance Company Limited through Slump Sale Agreement for an agreed consideration of Rs 74,04,88,292 (around 74 crore] that is Rs 50 Crores to Shriram City Union Finance Limited and Rs 24 crore to Shriram Transport Finance Company Limited.
* January 15, 2009: V.N. Dhoot resigned from the Board of Directors of Supreme.
* January 15, 2009: Venugopal Dhoot and Saurabh Dhoot resigned from NuPower as Director.
* January 15, 2009: Mahesh Punglia (DIN 01622009] was appointed as Director of NuPower along with Karunchandra Srivastava, Retd. IAS (Director Identification Number, DIN 00314951)
* March 20, 2009: Supreme, vide letter dated 20/03/2009, to NuPower expressed its interest for investing in the Company by the way of Fully Convertible Debentures.
* March 25, 2009: NuPower signed two Slump Sale Agreements with Shriram Transport Finance Company Limited (STFCL) and Shriram City Union Finance Limited (SCUFL)
* May 2009: Chanda Kochhar becomes the CEO & MD of ICICI Bank Limited.
* June 5, 2009: NuPower became a subsidiary of Supreme. Supreme acquired 49,994 equity Shares (24,996 equity shares from V.N. Dhoot and 22,500 equity shares from Pacific) of face value Rs 10 each respectively for consideration at Par Value.
* June 5, 2009: Deepak Kochhar acquired 2,498 equity shares of NuPower from Pacific of face value Rs 10 each.
* September 8, 2009: Videocon Industries Ltd. (VIL) advanced Rs 64 crore to Supreme. VIL has not specifically disclosed the same under the Related Party Transactions in its financial statement.
(VIL has not separately disclosed this amount in its financial statements, but it is admitted on oath that the amount was clubbed in figures under the head 'Advances' but was also not disclosed as Related Party Transactions as required under AS-18 being a transaction with Related party as Supreme was a related party of VIL Violation on these counts and also of Section 295 of CA, 1956 is reported in the Inspection report of VIL.)
(Supreme has disclosed the receipt of Rs 64 crore in its financial statement as at 31.03.2010 (FY 2009-10) under the head 'Unsecured Loans" but not disclosed the name from whom it has received the said amount. In FY 2010-11 the amount is reclassified and shown as Securities Application Money. Further in the FY 2011-12 onwards it was shown under long-term borrowings as OCD (zero coupon) and in all these years, the name of VIL has not been disclosed in financial statements.)
* September 8, 2009: The Sum of Rs 64 core received from VIL by Supreme was transferred to NuPower for subscription of Zero Coupon Fully Convertible Debentures.
* September 18, 2009: NuPower, STFCL and SCUFL mutually agreed to amend the two Slump Sale Agreements both dated 25/03/2009.
* March 25, 2010: NuPower allotted 64,00,000 zero coupon, FCD's of Rs 100 each to Supreme totaling to Rs 64 crore as against funds received on September 8, 2009. These Fully Convertible Debentures ('Series A Debentures') each were having a face value of Rs 100 to Supreme convertible on the earlier of
a) the date of commencement certificate issued by the relevant government authorities to NuPower certifying the commencement of 230 MW of wind power turbines;
b) the date when the Series A Debentures will compulsorily be required to be converted for filing of the draft red herring prospectus by NuPower with SEBI for the purpose of listing the securities of NuPower, and;
c) June 30, 2013 into such number of equity shares of NuPower having face value of Rs 10 each as are achieved by dividing a number being such percentage (not less than 75) of the subscription amount for the Series A Debentures paid by Supreme with fair market value of the Equity Shares as on the date of conversion of the Series A Debentures, as determined by the Board of NuPower in accordance with the terms of issue of the Series A Debentures at the time of conversion.
Chanda Kochhar Money Trail-II: How credence became victim of truth, byword for fraud
At the very core of the Chanda Kochhar family enterprise or La Familia remain two similar named companies which beg numerous questions. While the construct of NuPower Renewables came into being much later, IANS has now pieced together the etymology of the Kochhar-Advani enterprise.
For them, from the very beginning it was all about credence, convoluted and flawed. And then of course the triangle remains incomplete without the emergence of the ubiquitous Videocon and Venugopal Dhoot.
The first Credential Finance Ltd (CFL) was birthed on January 23, 1985 as Bloomfield Builders & Construction at Mumbai RoC (Registrar of Companies) with registration No. 035149. By 1994, it fell into the hands of the Kochhars, who renamed it Credential Finance Ltd.
The second CFL (no, these aren't bulbs) was birthed on March 18, 1992 as Vilkin Finance Pvt Ltd again registered at RoC Mumbai with registration No. 065966. On June 13, 1993, the name was changed to Credential Investments & Finance Ltd and finally to Credential Finance Ltd on September 27, 1994 (CFL 2).
The first Credential's entry in the Ministry of Corporate Affairs data base shows authorised capital of Rs 15 crore, paid up capital of Rs 10.95 crore against which there is an outstanding loan of Rs 2.25 crore. However, documents filed online under various heads show a loan of Rs 8.20 crore from two banks -- on August 31, 1996 a loan of Rs 4.70 crore @ 20 per cent per annum from SBI Home Finance, Kolkata, and on July 24, 1997, a loan of Rs 3.50 crore @ RBI rate + margin from IndusInd Bank, Mumbai. All the loan documents were presented by Deepak Kochhar before the banks and have his signatures. In the SBI Home Finance loan, the signatures are of the Videocon International Managing Director.
The second Credential's entry on the Ministry of Corporate Affairs data base shows that its authorised capital is Rs 5 lakh, paid up capital is nil and it is under liquidation. Though it does have Rs 26 crore as outstanding loans.
Now, once again we come to the Videocon connection with both these entities. Videocon's Venugopal Dhoot has been denying any business association with the Kochhars and his connection with NuPower has been proved conclusively.
In Credential Finance (CFL1), Videocon International has the highest number of preference shares (of Rs 100 each) listed against its name as of March 31, 2000. Of the total preference shares of 532,250, Videocon International held 150,000, various Kochhar family members -- Deepak, Rajiv, his wife Monika, Chanda, Vinodini (mother of Deepak & Rajiv), Virendra (father of Deepak & Rajiv) and Aarti Kochhar -- held 898, 747, 625, 473, 3, 2, 2, respectively. Furthermore, it is alleged that Kochhar shell companies ABS Components, Modern Fashions and KG Computers owned 125,000 shares, 120,000 shares and 8,750 shares, respectively.
In Credential Finance (CFL 2), the total number of shares from March 31, 2000 to September 30, 2014 are 5,634,500. As of September 30, 2014, the total number of equity shares of Rs 10 each were in the names of Credential Holdings (849,700), Deepak Kochhar (30,385), Chanda Kochhar (2,835), Monica Kochhar (3,750), Videocon International (1,000,000), Rajiv Kochhar (29,985); shell companies Modern Fashions Pvt Ltd (374,300), ABS Components Pvt Ltd (981,250), KG Computers Pvt Ltd (456,000), other Chanda Kochhar family members Mahesh Advani (20,420), Neelam Advani (20,420), long time Videocon employee S.K. Shelgikar (59,700), Vinodini Kochhar and Virendra Kochhar (15 shares each).
Pertinently, several unnamed "well-wishers" paid off the dues of Credential Finance - a now defunct company that was once run by Chanda Kochhar's husband and brother-in-law. In March 2009, the company in which Chanda Kochhar too was once a shareholder, entered into court settlement with multiple creditors.
According to the minutes of the Bombay High Court order, in at least one of the cases, Rs 40 lakh was paid to Banque Indo-Suez (now known as Calyon Bank) by the "well-wishers of and on behalf of" Credential Finance. As luck would have it, the directors of the company also changed more or less overnight. The settlements with the different creditors also brought to close an earlier contempt proceedings against Deepak Kochhar, husband of Chanda Kochhar and former Managing Director of Credential. The dues were paid in tranches initiating with pay orders issued by the ICICI Bank. However, the bank did not reveal the identity of the drawer or purchaser of the pay order due to rules of client confidentiality.
Chanda Kochhar Money Trail-III: When obfuscation becomes the signature move
What happens when you bring the fox to guard the henhouse? By structuring a convoluted and intricate matrix of entities - three of them actually - to obfuscate and throw the scent off for future investigators, the Kochhar brothers forgot one simple thing: that paper trails cannot be hidden anymore due to the data mining and compliance work done by ministry of corporate affairs (MCA). Fraud and shellcos or suitcase companies always leave a trail of paper. And so it was with the Kochhars.The trace-back begins with Modern Fashions, which was one of the principal shareholders in the two Kochhar Brothers Credential twins, along with ABS Components Pvt Ltd and KG Computers Pvt Ltd which were the other two. ABS, like Modern a shellco, the last return for which was filed in 2005. Like Modern Fashions, it became a victim of DeMo and was struck off post the cash cull exercise by Registrar of Companies (RoC).
Credential Finance Ltd's or CFL 1, as IANS has been reporting as part of an investigative series on the Kochhar family, balance sheet on September 30, 2000 shows it made an investment of Rs 1.25 crore in preference shares and Rs 98.13 lakh in equity shares of CFL, which amounts to Rs 2.23 crore invested in CFL. ABS was incorporated by Rajiv Gupta and Rajiv Garg in Delhi on May 19, 1998 with Rs 1,000 as capital. Its registered office was shown like Modern Fashions as B 33, SFS Houses, Sheikh Sarai 1, New Delhi-17.
Sometime in 1994, the ownership changed hands to Kochhars. This incidentally is the same year that Chanda Kochhar was elevated to AGM of ICICI Ltd. Majority shareholding of ABS was held by Rajiv Kochhar, 275,100 equity shares of Rs 10 each while balance 275,100 shares are shown as held by Kochhars family/relative.
The jiggery-pokery begins here. Form 20 B filed on April 13, 2006 with RoC for 2004-05 shows that authorised capital is Rs 75 lakh and paid up capital is Rs 55.01 lakh. In April 2006, the only time this company filed its return (online) for two successive years 2003-04 and 2004-05, it declared that its paid up capital was Rs 91.61 lakh which was more than its authorised capital of Rs 75 lakh. Post DeMo, it was struck off at serial number 366, out of a total of 24,945 companies that were knocked out by RoC Delhi on September 1, 2017.
Now, we come to the registered office address which again shows discrepancy and divergence. Physical scanned copy of Form 18 shows that with effect from March 20, 2006, ABS R.O. address was changed from 24, School Lane, Opposite Holiday Inn, Barakhamba Road, New Delhi-1, to UB 5 Arunachal Bhawan, Barakhamba Road, New Delhi-1 like Modern Fashions.
IANS visited the address (see pic) and found that this address actually doesn't exist, UB 4 and 7 exist, but UB 5 doesn't, so it clearly means that this address is fictitious, making it a complete suitcase or shellco. Here again, Form 18 filled online gives Sheikh Sarai as the address.
KG Computers Pvt Ltd
This company, another shareholder/investor in CFL, was struck off post-DeMo. CFL balancesheet shows that KG Computers made an investment of Rs 8.75 lakh in preference shares and Rs 45.60 lakh in equity shares, making the total investment of Rs 54.35 lakh.
KG was incorporated by Rajinder Kumar Garg and Amit Gupta in Delhi on May 19, 1988 with Rs 1,000 capital. Its registered office is shown as Sheikh Sarai, the same as Modern and ABS. The company changes hands in 1994 with the Kochhars stepping in.
Credential Holdings Pvt Ltd, a company incorporated by Rajiv and Deepak Kochhar on September 8, 1994 for Rs 200, owns the majority shareholding in KG Computers.
If you think following this Byzantine paper trail is mind-boggling, actually the tent poles and DNA of each are very much similar. Modern, ABS and KG are all shellcos, created for the purpose of obfuscation. KG was struck off at serial number 10,450 out of a total of 24,945 companies that were pole axed by RoC, Delhi on September 1, 2017. KG Computers like its two companions also shows UB 5 Arunachal Bhawan Barakhamba Road, New Delhi-1 as its address. Something that doesn't exist and photographs don't lie.
Credential Holdings
Over and above CFL 1 and CFL 2, there is Credential Holdings Pvt Ltd (U67120MH1994PTC080991) with an authorised capital of Rs 5 lakh and a paid up capital of about Rs 1 lakh. The annual return of CFL shows that CHPL had invested Rs 1.25 crore in preference shares and Rs 84.97 lakh in equity shares. Which totals about Rs 2.30 crore from Credential Holdings (CHPL) into CFL. CHPL was incorporated on September 8, 1994 by Deepak and Rajiv Kochhar again with an investment of Rs 200.
Both have shown identical addresses and describe themselves as business executive. In the master data base of MCA, this company remains - active - with its registered office shown as G/8 Maker Chambers V, Mumbai-21.
Chanda Kochhar Money Trail-V: Videocon's Dhoot complicit in Rs 64 cr payout to Kochhar
Twice over the course of the ongoing all-encompassing multi-disciplinary Chanda Kochhar-Videocon Industries probe has chairman Venugopal Dhoot accepted complicity in the dirty deal.
Dhoot reported to the CBI vide letter dated 25.4.2018 that "With reference to the captioned preliminary enquiry, I hereby submit that in my capacity as CMD of Videocon Industries, I have been entrusted with substantial powers of management inter alia including the authority to make investments/extend loans, advances etc, accordingly, Rs 64 crore given by the company to Supreme Energy Pvt Ltd is within the powers entrusted upon me."
This was disclosed by Dhoot during the inspection of Videocon during his statement under oath and through letter dated 15/11/2018. On 12.6.2018 a missive sent by VIL to SEBI states: "This was a decision in terms of authority as the matter is very old, we are checking whether there was any contract to this effect. Further in the next para, it is stated that no approval of audit committee was taken on the date of advance as there was omission on the part of Venugopal Dhoot to disclose the interest in the entity."
Slam dunk and an airtight case where the investigators have probable cause and clear collusion between Videocon's Dhoot and Kochhars.
The probe agencies have compiled the exact manner of flow of funds and the present status thereof in Videocon Group. Here is the anatomy of the collusive fraud:
* Videocon Iindustries Ltd (VIL) paid Rs 64 crores purportedly as "advance" to Supreme on 8/09/2009.
* VIL then assigned this advance/receivable from Supreme to its Group company IRCL on 05/07/2011.
* Indian Refrigerator Company Ltd (IRCL) it turn assigned it to another group company, Real Cleantech Pvt Ltd (RCLP) on 05/08/2011.
* The Present status of RCPL is "Struck off" in RoC Records as ROC struck this company under Section 248 being defaulting in fining AR and BS after 2014 even though the amount is still payable by Supreme to VIL Group.
* In lieu of this Advance, Supreme Energy allotted OCDs worth Rs. 64 Crores to RCPL on 05.10.2011.
* RCPL allotted 0% OCDs to IRCL on 31/03/2012.
* RCPL and IRCL are both VIL Group Companies and still continue to be same, except the fact that RCLP is now struck off.
* In view of RCLP being Struck Off Company, this receivable by RCPL/VIL Group from Supreme (or Kochhar Group of Companies) is highly nonexistent/doubtful. It is clear that Videocon Group had no serious intention to recover the funds.
Further, the flow of Rs 64 crore received from VIL by Supreme and further flow in Kochhar group is as under:
* Supreme Received Rs 64 crore from VIL on 08/09/2009 shown as unsecured loan as per BS as at 31.03.2010.
* On the same day, on 08/09/2009, Supreme transferred this amount to NuPower Renewables purportedly for subscription for allotment of Zero Coupon Fully Convertible debentures.
* NuPower allotted such debentures to Supreme on 25.03.2010.
* Such Debentures were converted to Equity on 19.03.2016 at a premium of Rs 1,156.50 per share to Supreme and allotted 548,650 equity shares aggregating to Rs 64 core. The premium was on the basis of a valuation report by PWC which is already under examination by Income Tax Department (details may be examined during inspection of NuPower).
* NuPower is in the business of Wind Power using such funds coupled with bank loans and from other entities too. The said wind power assets of NuPower were later hived off into three parts by way of Slump Sale to NuPower Wind Farms Limited (Under inspection) and Echanda Urja Private Limited (under inspection) and the third portion remains with NuPower.
How Companies/corporate structures have changed hands and considerations involved:
* Supreme was a company belonging to V.N. Dhoot as all the shares were held by Dhoot and his associates at the time of "advance" of Rs 64 crore of funds by VIL to Supreme.
* Dhoot transferred all his equity held in Supreme to Mahesh Punglia (his consultant CA) on 2.11.2010 at par (9990 equity shares of Rs 10 each at par) while Rs 64 crore was still receivable by VIL from Supreme and at present which is still receivable by RCPL (Videocon group Company)
* In the meantime, Dhoot floated another company NuPower jointly with a Company, Pacific Capital Services Private Limited (a company owned by the relatives of Deepak Kochhar) as 50:50 venture.
* NuPower became subsidiary of Supreme as result of sale of all 50% of his shares by Dhoot to Supreme at Par (24996 shares of Rs 10 each totaling to Rs 2,49,960) and Pacific sold to Supreme of its 22500 equity Shares of Rs 10 totaling to Rs 225000 at par). Rest of the shares held by pacific were sold to Deepak Kochhar at par.
* Later, on 12.03.2012, NuPower further allotted 1897000 equity shares of Rs 10 each to Deepak Kochhar as managing trustee of Pinnacle Trust and 100000 equity shares of Rs 10 each Sunil Bhuta on conversion of warrants. Consequently, NuPower ceased to be subsidiary of Supreme and 97.66 % were held by Deepak Kochhar and his associates and only 2.32% with Supreme.
* Puglia sold his entire share holding of 9990 equity of Rs 10 each in Supreme (which he had got at par from Dhoot to Deepak Kochhar in his capacity as the managing Trustee of Pinnacle Energy Trust on 29.09.2012 at par totaling to about Rs 10 lakh. On the same date, the remaining 10 shares held by Vasant Kakade (an associate of Dhoot) were transferred to Prem Rajani (an associate of Kochhar]. At this stage Dhoot, even indirectly, exited from the ownership of Supreme and it became a hundred percent company of Deepak Kochhar (through his trust) at par face value of Rs 10 per share even though at this stage also a sum of Rs 64 crore was due from Supreme to RCLP (Group company of Videocon).
* Thus, Deepak Kochhar owned and controlled both Supreme and NuPower even though at this stage also a sum of Rs 64 crore was due from Supreme to RCLP (Group Company of Videocon now struck off).
* Later, sums of about Rs 325 crore have flown in NuPower from Essar Group/Firstland Holding Limited between 2010 to 2012.
* NuPower acquired Wind Powers from Shriram Group and also constructed its own wind power business by consolidated funds in its kitty (sum total of funds from Videocon, Firstland, DH Renewable, bank loans etc).
* Later, this company under inspection namely NuPower Wind Farm Limited was incorporated by Deepak Kochhar.
* The Wind Power Business of NuPower was sold by slump sale to the company under inspection and another part to NuPower Wind farms and third undertaking remains with NuPower.
Chanda Kochhar Money Trail-VI: A modern tale of deceit
It is said that if you dress cronyism as a favour, then you wind up on skid row. Equally, sorrows dont come individually but in battalions. The tale of Chanda Kochhar and her husband Deepak intertwining their fate and destiny with Videocons Venugopal Dhoot leaves behind in its wake a smoking gun which refuses to go away from the scene of the crime.At every twist and turn in this long running soap which resembles the cult pulp soap Dynasty, Videocon and Dhoot turn up like a sugar daddy to sign off on sweetheart deals.
Three dubious shellcos find convergence as major investors in both the Credential Finance companies (CFL 1 & CFL 2) floated and owned by the Kochhar brothers - Deepak and Rajiv - as discovered by IANS in its detailed investigation earlier in the series. Modern Fashions, KG Computers and ABS Components. Curiously, Modern Fashions Pvt Ltd was struck off in the wake of demonetisation. Let us examine the Modern Fashions paper trail in government records.
CFL balancesheet reveals that Modern Fashions as on September 30, 2000 invested Rs 1.20 crore in preference shares and Rs 37.43 lakh in equity shares of CFL, a total of Rs 1.57 crore. Again, it emerges that there are two companies named Modern in the mix, just like there are two Credentials. Modern Fashion Pvt Ltd registered in Delhi (U18101DL1988PTC031753) and Moderne Fashions Pvt Ltd registered in Kolkata (U51909WB19 92PTC056997), which subsequently changed its name on MCA's website to Modern Fashions Pvt Ltd (U51909WB1992PTC56997), hitherto Modern Kolkata, a bonafide company not owned by Kochhars.
Modern Kolkata was incorporated on November 17, 1992 with its registered office as 9 Dacres Lane, Flat No 17, 2nd Floor, South Block, Kolkata 700069 by Vivek Himatsingka and Vishal Himatsingka. That is where the similarity ends.
Modern Kolkata seems bonafide with no connections to Kochhars. It files its returns regularly and appears to be completely genuine. Meanwhile, Modern Delhi was incorporated by Anjali Garg and Kamla Garg on May 19, 1988 with Rs 1,000 as authorised capital, its registered office is B 33 SFS House, Sheikh Sarai 1, New Delhi 110017.
Sometime in FY 2003-04, Modern Delhi surfaced on the radar as it filed its returns, showing a loss of Rs 7,680. RoC (Registrar of Companies) documents show that Rajiv Kochhar entered the company as a minority shareholder and took over its directorship on October 1, 1994. Majority shareholding was with Credential Holdings Pvt Ltd which was incorporated along with elder brother Deepak for Rs 200 on September 8, 1994. This is where Chanda Kochhar's brother-in-law Rajiv pops up.
Over time, Modern Delhi's authorised capital ramps up from Rs 1 lakh to Rs 1.55 crore on 4.10.1995. But the company's paid up capital is shown as Rs 1.78 crore in the returns filed in 2003-04 and 2004-05. This company is shown as "struck off" at serial number 13422 out of a total of 24,945 companies that were struck off by RoC Delhi on September 1, 2017 in their continuing action against errant companies after DeMo.
Now comes the Videocon link, in its returns for 2002-04, the company has shown an unsecured loan of Rs 1.05 crore. Further, it has stated that it made an investment of Rs 56.17 lakh (at cost) in buying 48,000 shares of Videocon International Ltd.
Modern Fashions owned 120,000 shares in CFL 1, while it held 374,300 shares in CFL 2. This is where the convergence sets in. Interestingly, Form 18 also shows how the address of this company has changed. First it was 33 SFS Flats Pocket B, Sheikh Sarai, New Delhi 17 and then it was changed to UB-5 Arunachal Bhawan, Barakhamba Road, Connaught Place, New Delhi, effective 20.3.2006. When visited, the Barakhamba Road address is clearly that of a suitcase company for it is just a hole in the wall, with no sign of life. Here again there is a major discrepancy where the physical copy of Form 18 and the online copy of Form 18 show different addresses.
Physical copy shows Modern Delhi's registered office as 24 School Lane, opposite Holiday Inn, Barakhamba Road, New Delhi-1, to UB 5 Arunachal Bhawan, Barakhamba Road, New Delhi-1. Which is at odds with the Sheikh Sarai address.
Chanda Kochhar Money Trail-VII: The mom and pop shop that Kochhar-Advani fam built
The cozy Kochhar-Videocon deal smacks of absolute cronyism, more so because Chanda was on the credit committee, which cleared the loan, instead of maintaining an arm's length, which makes it even more questionable.What about firewalls and other governance issues that this raised? Or they don't apply to private banks and their CEOs? Are they then a law onto themselves? Shouldn't she have recused herself, like judges do these days, isn't there a clear conflict of interest? And what was RBI doing, was it asleep on the wheel?
She was on the credit committee that sanctioned a loan of Rs 3,250 crore to the Videocon Group in 2012 and she chose to be blase about it till the full force of probe agencies was unleashed against her. And Rs 3250 crore isn't exactly small potatoes. Then ICICI chairman M.K. Sharma added to the mystery: "The board does not see this as a conflict of interest in any manner since Videocon group is not an investor in NuPower Renewables, as there was no need to recuse herself from this committee. This committee had many independent directors and the committee was not chaired by her...
"We have satisfactorily replied to the questions of all the regulators which is an ongoing process within a regulated entity like a bank and the regulators and the other government departments. However, this is privileged information between the regulators and the bank and it would be totally inappropriate for me to go public with them."
In what can only be described as the mom and pop shop cult, In 2001, a total of seven members of the Kochhar family including brothers Deepak and Rajiv Kochhar, their father Virendra Kochhar, Chanda's brother Mahesh and his wife Neelam together held 2% in Credential Finance, along with Videocon group that held 17.74%. Chanda Kochhar and six members of the Kochhar family held shares in a little-known firm called Credential Finance Ltd, along with Videocon group, at least as far back as 2001, regulatory filings show.
Three of the Kochhars were also directors on the company's board in 1995, when it was founded, though it's not clear if Videocon held a stake in the company at that time.
A total of seven members of the Kochhar family-including Chanda Kochhar, her husband Deepak Kochhar and his brother Rajiv Kochhar-together held a 2% stake in Credential Finance, its shareholding pattern for that year (2001) filed with the Registrar of Companies (RoC) in 2007 showed.
In the same year (2001), Venugopal Dhoot's Videocon International Ltd held 17.74% and its associate firm Joy Holdings held 0.8% in Credential Finance. Another major shareholder was Mahesh Chandra Punglia, holding 0.8%.
Chanda Kochhar was elevated as ICICI Bank Ltd's chief executive officer in 2009. She sold or transferred her shares in Credential Finance before 2010, as records during 2010 to 2014 do not show her holding any shares in the firm. The other six Kochhars continued to hold their shares at least until 2013-14.
The company has no clear promoter, as all its 90 shareholders hold less than 5% in the company. Founded in 1995 as Bloom Field Builders and Construction Co. Ltd, the company changed its name to Credential Finance in the mid-90s, according to RoC documents. Credential Finance's directors since 1995 included Deepak Kochhar as managing director, besides Rajiv Kochhar and sister-in-law of Chanda Kochhar - Neelam Mahesh Advani.
While all this much was being raked, Chanda Kochhar behaved as if nothing had happened. ICICI tried to paper over the obvious cracks which had begun to resemble fault lines. Did this amount to Pontius Pilate (was the fifth prefect of the Roman province of Judaea, serving under Emperor Tiberius from AD 26 to 36. He is best known today for the trial and crucifixion of Jesus) washing his hands of the grievous crime.
In January 2009 just after buying a stake in NuPower, Dhoot transferred his shares to Deepak Kochhar for Rs 2.5 lakh and resigned as director. But the association with the Dhoot family did not end there.
In March 2010, NuPower got a loan of Rs 64 crore by a company named Supreme Energy, entirely owned by Mr Dhoot. At the end of the same month, Supreme Energy became a 94.99 per cent shareholder in NuPower. The remaining shares were held by Mr Kochhar.
Chanda Kochhar Money Trail-VIII: Dragnet closes in on Chanda & Deepak Kochhar
As the dragnet closes in on the Chanda Kochhar-Deepak Kochhar family enterprise, investigative agencies have found several fresh money trails. One that is extremely perturbing and damaging is the financial statement filed by NuPower Renewables on March 31, 2010.The agencies work on the premise that there is a quid pro quo. If the long hours of relentless questioning is anything to go by, the agencies have hit paydirt. IANS, which has been pursuing the money trail in this case, has now found fresh evidence. The source of funds filed with the RoC and the details of the 'investor' have been examined and reported upon the inspection of NuPower. Emergent details about Shanmuga Housing and Properties Pvt Ltd caught the eye of the investigators simply because ostensibly this company was not related to Supreme or NuPower but master data and directorship details as per the MCA records showed otherwise.
Armed with the war chest of Rs 64 crore Videocon windfall and debenture application money of Rs 7 crore from the same Shanmuga plus a short term loan of Rs 2 crore, Deepak Kochhar went to the market. He purchased Wind Energy Generators from Shriram Transport Finance Co Ltd (STFCL) for Rs 50.25 crore and Shriram City Union Finance Ltd (SCUFL) for Rs 23.80 crore.
Meanwhile, Videocon Group incorporated a new company, Real Appliances Pvt Ltd, on July 22, 2010. The very same day NuPower extended the exercise period for conversion of 19,97,500 warrants held by Deepak Kochhar from July 30, 2010 to April 30, 2011. Then, Deepak Kochhar transferred 100,000 share warrants of NuPower on August 6, 2010 in favour of Sunil Bhuta, CFO of Deepak Kochhar Group of Companies.
The NuPower board was then informed on October 21, 2010 that Shanmuga Housing & Properties, which had earlier brought in Rs 7 crore by way of debenture application money, now sought refund of the application money in a curious turnaround. Venugopal Dhoot transferred his entire shareholding i.e. 9,990 equity shares held in Supreme to Mahesh Chandra Pungalia at par value on November 2, 2010.
On December 20, R.N. Dhoot, S.M. Hegde and S.P. Dhoot associates and nominees of V.N. Dhoot transferred one equity share each held by them in NuPower to Prem Rajani, Shruti Bhuta and Bhupinder Bajaj, all associates and nominees of Deepak Kochhar. Cronyism and paper trail both validated.
Here is the sequence of events as documented by the probe agencies:
NuPower transferred its 18,97,500 equity share warrants to Deepak Kochhar as Managing Trustee of Pinnacle Energy Trust and 1,00,000 equity shares to Sunil Bhuta, as they exercised the option to convert the 19,97,500 warrants into 19,97,500 equity shares of Rs 10 each by depositing the exercise price of Rs 9 per converted equity share with NuPower.
Consequent to the said conversion/allotment, NuPower ceased to be a subsidiary of Supreme. Consequently, at this point of event, Supreme held only 2.32 per cent and 97.68 per cent were held by Deepak Kochhar and his associates and companies related to him.
March 31, 2012
RCPL issued zero per cent OCD's to IRCL.
September 29, 2012
Mahesh Chandra Punglia and Vasant Kakade transferred 9,990 and 10 equity shares each of Supreme to Pinnacle Energy Trust (wherein Deepak Kochhar is the Managing Trustee) and Prem Gul Rajani (associate of Deepak Kochhar), respectively. In effect, Supreme ceased to be a Videocon company, and became Deepak Kochhar's company.
April 29, 2013
Pinnacle Energy Trust invested Rs 8 lakh to subscribe to 80,000 shares of Supreme.
May 31, 2013
NuPower took on record the consents received from Supreme and Deepak Kochhar (Pinnacle Energy Trust), holders of 71,00,000 zero coupon rate Fully Convertible Debentures for amendment to terms of the conversion and accorded for amendment by extending the Conversion Date of the FCDs from June 30, 2013 to June 30, 2014.
March 20, 2014
NuPower Board took on record the consents received from Supreme and Deepak Kochhar (Pinnacle Energy Trust), holders of 71,00,000 Zero coupon rate Fully Convertible Debentures for amendment to terms of the conversion and accorded for amendment by extending the Conversion Date of the FCDs from June 30, 2014 to June 30, 2015.
March 19, 2015
NuPower board took on record the consents received from Supreme and Deepak Kochhar (Pinnacle Energy Trust), holders of 71,00,000 zero coupon rate Fully Convertible Debentures for amendment to terms of the conversion and accorded for amendment by extending the Conversion Date of the FCDs from June 30, 2015 to June 30, 2016.
March 19, 2016
NuPower, placing reliance on the valuation report dated January 27, 2016 issued by Price Waterhouse & Co LLP, CA converted 71,00,000 Zero Coupon Rate Fully Convertible Debentures of Rs 100 each into 6,08,659 equity shares of Rs 10 each at a premium of Rs 1,156.5 per share, in aggregate, as per the details below:
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Name of holder: Supreme Energy Private Limited
Amount of Debentures: Rs 64,00,00,000
Resultant equity shares issued and allotted on conversion of debentures: Rs 5,48,650
Face value of resultant equity share: Rs 10
Total amount of equity shares capital: Rs 54,86,500
Amount transferred to securities premium account: Rs 63,45,13,500
Name of holder: Deepak Kochhar
Amount of Debentures: Rs 7,00,00,000
Resultant equity shares issued and allotted on conversion of debentures: Rs 60,009
Face value of resultant equity share: Rs 10
Total amount of equity shares capital: Rs 6,00,090
Amount transferred to securities premium account: Rs 6,93,99,910
Total
Amount of Debentures: Rs 71,00,00,000
Resultant equity shares issued and allotted on conversion of debentures: Rs 6,08,659
Total amount of equity shares capital: Rs 60,86,590
Amount transferred to securities premium account: Rs 70,39,13,410
Present status as claimed by VIL:
Videocon submits that the advance given by Videocon will come back to Videocon either by way of:
1. Equity of Supreme (together with holding of Supreme in NuPower i.e. approximately 10 per cent), in case full conversion is opted by RCPL.
2. Repayment of Rs 64 crore along with interest/premium/fee equivalent to 60 per cent (i.e. Rs 38,40,00,000) aggregating to Rs 102.40 crore, in case conversion option is not exercise by RCPL.
