Chanda Kochhar Money Trail: 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 ₹15 crore, paid up capital of ₹10.95 crore against which there is an outstanding loan of ₹2.25 crore. However, documents filed online under various heads show a loan of ₹8.20 crore from two banks — on August 31, 1996 a loan of ₹4.70 crore @ 20 per cent per annum from SBI Home Finance, Kolkata, and on July 24, 1997, a loan of ₹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 ₹5 lakh, paid up capital is nil and it is under liquidation. Though it does have ₹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 ₹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 ₹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, ₹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.