CBI lodges FIR against Videocon chief, unknown bank officials

Mumbai: The Central Bureau of Investigation (CBI) on Tuesday filed a case against Videocon group chairman and managing director Venugopal Dhoot for causing wrongful loss to a consortium of banks led by State Bank of India, including ICICI Bank and IDBI Bank.

The CBI FIR also names unknown bank officials booked for cheating, criminal conspiracy and under Prevention of Corruption Act. The FIR alleges irregularities in loans extended to Videocon Mozambique Rovuma 1 (VMRL), a group company.

VMRL is a subsidiary of Videocon Hydrocarbons Holding (VHHL), a company registered in Cayman Islands, which has oil and gas assets abroad, including Mozambique, Indonesia and Brazil.

The FIR said that the CBI conducted a preliminary inquiry against unknown officials of the ministry of petroleum and natural gas, ONGC Videsh, Oil India, Bharat Petro Resources (a subsidiary of Bharat Petroleum Corporation) and the consortium of banks for allegedly conniving with VMRL.

In 2008, VHHL acquired a 10% participating interest in an oil and gas block in Rovuma Area 1 Block Mozambique from a US-based petroleum company. ONGC Videsh and Oil India had acquired Mozambique assets in January 2014, for $2,519 million. It needed a NOC from the consortium for making payments for the assets, the FIR said.

Videocon asked the consortium to pay $650 million to Standard Chartered Bank (SCB), London, from the sale proceeds but the banks paid $705 million and they did not raise an objection that the bank’s outstanding had already been cleared, the FIR added.

In 2012, the SBI-led consortium sanctioned the standby letter of credit facility of $2,773.6 million to VHHL for development of their overseas assets in Mozambique, Indonesia and Brazil and for refinancing facilities. Thereafter, Videocon asked the bank to increase the credit facilities.

In February 2013, Videocon informed the consortium the loan had increased from $400 million to $530 million and asked the banks to pay it off and take charge of oil and gas assets, the FIR said. The banks refinanced the letter of credit facility of $1,103 million, including an outstanding of $400 million to SCB. The consortium, without any verification, paid the loan of $530 million to SCB, but did not take over the charge on the Videocon’s oil and assets in Mozambique. The SCB loan account was required to be closed by VHHL, which was not done.

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