Former ICICI chief Chanda Kochhar, 10 others booked for 'cheating'

New Delhi: Chanda Kochhar, former ICICI Bank Managing Director and CEO, and 10 others are facing charges for allegedly cheating a tomato paste company, causing it a loss of Rs 27 crores.

The case, dating back to 2009, recently came to the limelight after the Patiala House Court on December 9 ordered the Delhi Police to initiate an investigation.

Subsequently, the Economic Offence Wing of the Delhi Police registered an FIR on December 20, citing allegations of cheating and criminal conspiracy.

Those named in the FIR include Chanda Kochhar, Sandeep Bakshi (CEO & MD ICICI Bank), Vijay Zagade (ex-manager ICICI Bank), unnamed officials of ICICI Bank's Global Trade Services unit in Mumbai, Atul Kumar Goel (MD & CEO Punjab National Bank), K.K. Bordia (ex-GM Oriental Bank of Commerce), Akhila Sinha (AGM PNB & the then Branch Head of OBC), Manoj Saxena (AGM PNB & the then Branch Head of OBC), and K.K. Bhatia (ex-Chief Manager at OBC).

According to the FIR, lodged by Shammi Ahluwalia, Director of P & R Overseas Pvt Limited (Tomato Magic), the accused allegedly conspired to present a 'Letter of Credit' (LoC) from a Foreign Bank as a genuine document.

The LoC, crucial for an export order of tomato paste, was purportedly issued by the Royal Bank of Scotland (RBS) but was later revealed to be from a local Russian bank named RBS Alliance, known for its dubious reputation.

The FIR stated: "ICICI Bank fraudulently authenticated the LoC as issued by Royal Bank of Scotland, knowing fully well that the LoC (L/C) was from a local Russian Bank: RBS Alliance. The said LoC was amended thrice, but on all these occasions, ICICI repeatedly committed folly."

"ICICI Bank which in this case is the Advising Bank and its officers were to enquire whether the L/C being offered was authentic and issued by a bonafide banking entity. As will be stated later, the L/C was a complete fraud and forged but was verified to be authentic and legal by ICICI Bank in league and in conspiracy with the L/C issuing bank," the FIR read.

The FIR stated that the complainant company received the L/C purportedly issued by Royal Bank of Scotland, a well-known ‘A’ class International Bank of repute.

"It was categorically stated in the said Credit that the same is subject to terms and conditions as contained in Uniform Customs and Practise for Documentary Credits… the L/C was received through ICICI Bank, Mumbai, being the Advising Bank, hired by the actual L/C issuing Bank, RBS Alliance, Moscow, which did not enjoy good reputation in honouring its documentary credits," the FIR read.

The complainant company, Tomato Magic, a pan-India supplier of tomato paste, had received an export order from a Russian buyer for 1000 metric tonnes of Chinese tomato paste. The order, initially valued at $10 lakh, increased to $18.48 lakh (approximately Rs 8.68 crore) for an additional supply of Iranian-origin tomato paste.

To mitigate payment risks, the order was contingent on a 100 per cent irrevocable LoC issued by an 'A' class bank, with ICICI Bank acting as the advising bank. The subsequent wrongful authentication of the LoC by ICICI Bank allegedly led to a series of events resulting in a loss of Rs 27.66 crores for Tomato Magic, the complainant said.

The FIR further noted that in May 2011, ICICI Bank, in response to the complainant's concerns, provided "frivolous" and "untrue" answers, attempting to evade responsibility.

Surprisingly, Oriental Bank of Commerce (now Punjab National Bank) did not challenge ICICI Bank's stance, leading to a consent to the correctness of the information.

The complainant alleged that the company had been cheated at the hands of the all accused, who hatched a criminal conspiracy with prior meeting of mind having a common intention to commit fraud, criminal breach of trust and cheating to the tune of $1000,000 in the forged and fraud Letter of Credit allegedly issued by RBS Alliance and not by Royal Bank of Scotland and thereafter used the said forged and fabricated documents as genuine one.

"The erring Accused No1 ICICI Bank violated RBI Guidelines to protect a Fraudster Bank. Based on two items that the Complainant handpicked up from the internet points to the fact that RBS Alliance, the L/C issuing bank, was a fraudster. Pertinent to mention that, ICICI bank, being the Advising Bank in India, had a collaborative relationship with RBS Alliance to swindle Indian businesses," the FIR said.

"Also, because the Accused No.1 had first received the L/C through SWIFT from RBS Alliance and then was to the Complainant Company, clearly confirms the alliance between the two (knowing fully well the Issuer of the L/C is RBS Alliance)... The complainant never directly received the L/C from the buyer in Russia and the entire set of L/C & its 3 amendments were routed through Accused No.1 ICICI bank, the Advising Bank. Therefore, an investigation into the arrangement ICICI Bank had with RBS Alliance, a fraudster, is a must to find out the modus operandi, which is not possible without setting the criminal law in motion by registering an FIR," it added.

On December 12, the Supreme Court adjourned till January 3, 2024, the hearing on the Central Bureau of Investigation's petition challenging the interim bail granted by the Bombay High Court to Kochhar in the alleged Videocon loan fraud case.

IANS with edits