According to officials, the CBI detained Videocon Group founder Venugopal Dhoot on Monday in connection with the ICICI Bank loan fraud case.
The 71-year-old Dhoot was taken into custody on 26 December , hours before Chanda Kochhar, the former CEO and MD of the ICICI Bank, and her husband Deepak Kochhar were scheduled to appear before a Special Court for a remand hearing.
The three and other suspects will soon be the subject of a charge sheet from the CBI, they claimed.Monday marks the end of the Kochhars’ three-day detention after their arrest on December 23.
Chanda Kochhar and her husband Deepak were detained by the CBI on the grounds that they were refusing to cooperate with the investigation and giving evasive answers.
CBI on ICICI Bank loan fraud case
The CBI claims that the Kochhars and Dhoot were named as defendants in a FIR filed in 2019 under IPC sections related to criminal conspiracy and provisions of the Prevention of Corruption Act, along with businesses managed by Deepak Kochhar, including Nupower Renewables (NRL), Supreme Energy, Videocon International Electronics Ltd., and Videocon Industries Limited.
The CBI alleged that ICICI Bank broke the Banking Regulation Act, RBI norms, and the bank’s credit policy by extending credit worth Rs 3,250 crore to Videocon Group entities backed by Dhoot.
In accordance with the agreement, Dhoot allegedly invested Rs 64 crore through Supreme Energy Pvt Ltd (SEPL) in Nupower Renewables and transferred SEPL to Pinnacle Energy Trust run by Deepak Kochhar through a complicated method between 2010 and 2012.
From industry leader to a defaulter
The story of Venugopal Dhoot is that of an aggressive businessman from a small town who aspired to reach the top. He began with a family that owned a Bajaj Auto scooter store and eventually rose to become the boss of a reputable home appliance business that could afford to have Shah Rukh Khan, the biggest star in Bollywood, serve as its brand ambassador.
In his prime, Venugopal Dhoot, who has since been detained in connection with the ICICI Bank loan scam, was not one to settle with modest accomplishments like Videocon’s ascent to the position of world’s largest television manufacturer.
The late Nandlal Madhavlal Dhoot created the Videocon Group in 1984, and his eldest son, Venugopal, was significantly responsible for encouraging the company to develop into different industries, including oil and gas,real estate and retail, beyond its successful consumer electronics and home appliances business.
Dhoot, the safari-suited businessman, was born into an agricultural family in Ahmednagar (Maharashtra), where his father ran a cotton ginning factory and a wholesale grain business.
Dhoot’s family tried their luck in the new territory of manufacturing conventional tube-based color television sets. Dhoot, who had an engineering degree from Pune University, went to Japan for a year to train with electronics companies.
In 1986, he founded Videocon International, which aimed to manufacture 1,00,000 TV sets annually. With affordable prices, it squeezed contemporary competitors like Miic Electronic (Onida), Salora, Weston, etc. Its TV models like Bazooka and Bazoomba were market favorites in the early 90s.
After its success in consumer electronics and home appliances, Dhoot Videocon Industries expanded into other areas such as oil and gas, mobile phone services, etc.
However, Dhoot’s decline began when it entered the mobile phone sector with Videocon Telecommunications.
Furthermore, in the late 1990s, South Korean giants such as LG Electronics and Samsung entered the Indian market, disrupting consumer electronics and appliances with cutting-edge technology and high-quality products at reasonable prices.
The Future of Videocon
As Videocon failed to meet the challenges posed by rivals Sony, LG, and Samsung, its revenue stagnated and it gradually accumulated debt.
Dhoot attempted to reduce his debt by selling some of his assets. The company merged its DTH business with Dish TV. They tried to sell ownership in some of their gas fields and telecom business, but it didn’t work. Finally, its creditor dragged it to the insolvency tribunal NCLT in 2018.
It owed the banks approximately Rs 31,000 crore, including interest. The National Company Law Tribunal (NCLT) has conducted a consolidated corporate insolvency resolution process involving Videocon Industries and the other 12 Videocon group companies at the request of lenders.
The NCLT approved a bid of Rs 2,692 crore from billionaire Anil Agarwal’s Twin Star Technologies to take over Videocon Industries in June 2021. This was also a source of contention. Earlier this year, the National Company Law Appellate Tribunal (NCLAT) rejected Twin Star’s Rs 2,692 crore bid, directing that new bids be solicited.
Despite Twin Star’s Supreme Court challenge, Videocon Industries’ creditors are still looking for a buyer. Some sources claim that the lenders may even consider liquidation.Some sources claim that if the lenders are unable to find a buyer for the once-successful corporation, they may even consider liquidation.