ICICI Bank Says No Individual Loans Given To Videocon Group’s Associate Firms
ICICI Bank Ltd. has clarified that it did not sanction loans to any individual company under the Videocon Group.
The bank did not provide individual facility to any of the five companies mentioned in a media report, it said in a stock exchange filing today after Firstpost reported that the Chandra Kochhar-led lender had provided loans to the Videocon Group against the collateral of different group companies. ICICI Bank clarified it had participated in a consortium for debt consolidation of the existing loans to Videocon Industries Ltd. and twelve associate companies.
ICICI Bank was not the lead bank in this consortium and the Information Memorandum for the loans were prepared by other banks.ICICI Bank's Stock Exchange Filing
The clarification comes amid allegations of nepotism surrounding loans worth over Rs 3,250 crore given by ICICI Bank to the Videocon Group in 2012. Since then, Videocon has been classified a non-performing asset.
The private lender said that the consortium had assessed financials of the Videocon Group as part of the debt consolidation programme. Lenders on the consortium then decided on a structure that cash flow from all “obligor” companies would go towards servicing debt. Accordingly, the lenders created their ‘right' or ‘charge' over the assets of all obligor companies. The twelve associate companies of Videocon were made co-obligors of the loans, meaning that they were to pay for the loan if the group defaulted.
The Firstpost report, ICICI Bank said, represents the bank's filing for its rights over the assets as a collateral for a loan.
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