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CBI is to register an FIR against Videocon Chief

The Central Bureau of Investigation (CBI) on June 23 booked Videocon chief Venugopal Dhoot on allegations of corruption in the financing of the company’s oil and gas assets in Mozambique.

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A preliminary inquiry revealed that unknown officials of the Ministry of Petroleum and Natural Gas, ONGC Videsh, Oil India Limited, Bharat Petroleum Resources Limited (a subsidiary of BPCL) and a consortium of banks (including the State Bank of India (SBI), IDBI Bank and ICICI Bank) led by SBI, allegedly colluded with directors and promoters of Videocon Mozambique Rovuma 1 Limited (VMRL), a subsidiary of Videocon Hydrocarbon Holdings Limited (VHHL). These findings show that in 2008 VHHL, the subsidiary of the Videocon Industries Limited (i.e. VIL), acquired around 10 percent “participating interest” in oil and also gas block in Rovuma Area 1 block, Mozambique, from the US-based Anadarko as well.

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This was later acquired by ONGC Videsh Limited and Oil India Limited in January 2014, for $2,519 million, officials told news agency PTI.

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A standby letter of credit (SBLC) facility of $2773.60 million was sanctioned to VHHL in April 2012 by a consortium of banks led by SBI. This, as per the inquiry, was given for the purpose of appraisal and development of their overseas oil and gas asset in Mozambique, Brazil, and Indonesia and other funding requirements in relation to the said oil and gas asset and for the refinancing of existing facilities. VHHL, a company registered in the Cayman Islands dealing in the oil and gas business, operates as a holding company of the Videocon Industries Limited (VIL). The inquiry also brought to light that Venugopal Dhoot is the Chairman and Managing Director of VHHL.

The SBLC facility of around $1103 million was refinanced that included an outstanding of around $400 million to Standard Chartered Bank (SCB), London. “The first charge on VIL’s oil and gas asset was a part of SCB’s security,” as the FIR told. About 10 months and later, VIL told that the consortium that SCB loan has increased to around $530 million, requesting to pay it and take over charge of oil and gas assets as well. The consortium allegedly approved the increased amount without any verification or inquiry, as the agency told. After the payment, the consortium should have taken the charge on the gas and oil assets of VIL, and also the loan account of SCB should have been closed by VHH, as it told.

“The facts and circumstance prima facie show that unknown officers of lender banks led by SBI in conspiracy with Venugopal Dhoot, CMD of the Videocon Industries Limited allowed VHHL, to continue to the avail the facility from SCB, London as well, with dishonest intention by not creating a charge on Mozambique asset and thereby cause wrongful gain to Videocon and also the wrongful loss to Indian PSU banks,” as it alleged as well.

 

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