Levelling fresh allegations of quid pro quo deals by the ICICI Bank MD and CEO Chanda Kochhar, the independent activist and whistle-blower Arvind Gupta has alleged that Ruia brothers of Essar group got undue favours from the bank for “round-tripping” investments into her spouse Deepak Kochhar’s NuPower Group.

Levelling fresh allegations of quid pro quo deals by the ICICI Bank MD and CEO Chanda Kochhar, the independent activist and whistle-blower Arvind Gupta has alleged that Ruia brothers of Essar group got undue favours from the bank for “round-tripping” investments into her spouse Deepak Kochhar’s NuPower Group. The Ruias funded the NuPower and its subsidiary through their son-in-law Nishant Kanodia and nephew Anirudh Bhuwalka during December 2010 to March 2012 by subscribing to compulsorily convertible preference shares and equity shares, Gupta has alleged in his fresh letter dated May 11, 2018, addressed to Prime Minister Narendra Modi.

Almost two years back (March 2016), he had written a letter to the prime minister alleging dirty dealings between the bank, through Chanda Kochhar, and the Videocon Group to benefit her family. Citing data accessed from the Registrar of Companies (RoC) filings by NuPower Renewables, Gupta’s letter reveals that Nishant Kanodia (husband of Ravi Ruia’s daughter Smiti Ruia) invested in NuPower via Firstland Holdings, Mauritius -the holding company of Matix Group (co-promoted by Kanodia).

Firstland Holdings, Mauritius subscribed to a total of 3,243,752 share of Rs 1,000 each of NuPower Renewable Ltd during December 31, 2010, to March 21, 2012, in four different tranches amounting to Rs 324.37 crore, as per the RoC filings by NuPower. Anirudh Bhuwalka, nephew of Shashi Ruia, owned A-One Motors & Services Ltd acquired NuPower Technologies through AMW Motors Ltd which is owned and controlled by Asia Motor Works Holdings Ltd — eventually controlled by the Essar Group, the letter writes. “Essar Group has round tripped investment payments to NuPower group via Firstland Holdings, Mauritius and had handsomely rewarded Deepak Kochhar…The Matix Group front ended the Firstland Holdings, Mauritius for investing Rs 325 core in the NuPower Group — the group owned by the husband of Chanda Kochhar. “Evidently, the malice of quid pro quo extends to another crony capitalist – the Ruia brothers of the Essar Group now headquartered in Mauritius — the safe haven and a safe passage for global money laundering,” Gupta said.

These dealings happened during the period when Essar Group got sweetheart deals from ICICI Bank’s overseas branches in Singapore, the UK and New York to acquire Essar Steel Minnesota (USA) and Algoma Steel (Canada), the letter alleged. The lender through a consortium as a lead banker lent USD 530 million to Essar Steel in 2010, to Essar Oil USD 350 million to acquire Stanlow refinery in the UK, it said. “All these investments by the Essar Group turned bad and have faced liquidation and bankruptcy proceedings for recovery of the investments,” Gupta said in his letter.

Further, he has alleged that Essar Capital Holdings, Mauritius compensated the Matix Group for funding NuPower Renewable group by subscribing to the equity offering by the Matix Fertilisers and Chemicals during December 2010 to August 2011 by buying 163,540,343 shares of Rs 10 each for Rs 163.53 crore. When asked for comments on the whistle-blower’s letter, ICICI Bank said: Typically, we do not respond to client specific queries…With regards to Essar Steel Minnesota, we would like to inform you that a consortium of seven Indian banks including ICICI Bank had sanctioned loans to the entity. Also, large US funds gave loans to the company. Out of the total debt of the company of USD 1.02 billion, ICICI Bank’s share was less than 25 per cent.” It also said that the figure of USD 530 million loan was “grossly overstated”. “Due to various factors, the loan facilities provided to this project were classified as non-performing by all lenders. The resolution process pursuant to the same is under process. Further, we would like to state that while sanctioning this loan, all the internal processes of credit risk rating, credit appraisal and credit approval were duly followed within the bank. Hence, it will be totally inappropriate and misleading to attribute any wrong motives to ICICI Bank for these loans.”

An Essar group spokesperson said, “A letter by one Arvind Gupta has made certain libelous accusations against Essar. We strongly condemn these allegations, which are clearly motivated. Essar does not have any business interest in Firstland Holdings Ltd.” “Moreover, as we understand, AMW Motors Limited Mumbai has not made the investment of Rs 197 crore in Nupower, contrary to the claims made in the letter. Essar has been dealing with ICICI since 1980. All transactions with them have been made in a very open and transparent manner, and in accordance with all applicable laws of the land,” it added.

While Matix Group said it categorically and unequivocally refutes the allegations made in the letter purportedly written by one Arvind Gupta. “The letter makes claims that are completely false and baseless, and seem to be driven by a vested interest and an ulterior motive. Essar does not have any business interest in Firstland Holdings, contrary to what is being alleged. Firstland Holdings’ investment in Nupower was made on merit to participate in the renewable energy sector, and has since been divested. No loans were ever taken by Matix from ICICI Bank,” Matix said in a statement.

Embattling crisis at the top-level, ICICI Bank earlier this week said its board has decided to launch an independent enquiry into allegations of ‘conflict of interest’ and ‘quid pro quo’ in Kochhar’s dealing with certain borrowers. The matter relates with allegations of involvement of Kochhar and her family members in a loan provided to Videocon group on a quid pro quo basis.

Earlier today, the bank came with a clarification that Kochhar has not been sent on leave and is out of office due to her planned annual leaves. Not to mention, the board of the bank in earlier in March-end this year had fully backed the bank CMD denying any wrongdoing on her part. The Reserve Bank in its 2016 investigation in the matter had raised questions over the ownership of the Mauritius-based entity, First Land Holding, which had invested Rs 325 crore in NuPower.

Read more: Whistle-blower levels fresh allegations of quid...

The Indian government had last year said it plans to have 100 per cent electric vehicles in public transport and 40 per cent in personal mobility by 2030. (Reuters)

US-based electric car major Tesla today alluded to a challenging environment for not being able to enter India, a market which it would love to be in, according to company’s Chief Executive Elon Musk.

“Would love to be in India. Some challenging government regulations, unfortunately. Deepak Ahuja, our CFO, is from India. Tesla will be there as soon as he believes we should,”
Musk tweeted in a reply to a query about the automaker’s absence from the Indian market.

The Indian government had last year said it plans to have 100 per cent electric vehicles in public transport and 40 per cent in personal mobility by 2030.

However, earlier this year it changed its stance and decided against formulating an electric vehicle (EV) policy saying technology should not be trapped by rules and regulations.

Various automakers have sought clarity in policy for electric vehicles in India to formulate their plans in the segment. Musk in a tweet last year had also hinted that Tesla may have to put its India plans on hold owing to local sourcing norms and supply issues.

Musk in a tweet last year had hinted about the company’s plans to enter India in the summer. Prior to that, Tesla had stated that it planned to enter India with its Model 3 in 2017 while it began global rollout of the vehicle in late 2016.

In September 2015, Prime Minister Narendra Modi had visited Tesla’s facility in San Jose and showed keen interest in some of their path breaking inventions, particularly in the renewable energy sector which can have multiple applications in remote rural areas.

In 2014, Tesla had said it was keen to enter the Indian market and even identified the country as one of the possible locations to set up a manufacturing plant in Asia.

It, however, said high duty on imported vehicles and lack of a separate category for electric cars prevented it from selling vehicles here despite having a huge potential.

Tesla’s portfolio includes products like Model S and Model X.

Read more: Elon Musk missing India flight: Know what is...

Global industrial technology, ZF, Wilhelm Rehm, ZF Friedrichshafen, auto sector The company plans to have 2,500 engineers in its new technology centre in Hyderabad by 2020.

Global industrial technology and auto-component supplier ZF had been preparing for the ongoing worldwide transition into electric vehicles since as early as 2012. The company plans to have 2,500 engineers in its new technology centre in Hyderabad by 2020. It also has a significant presence in the wind energy industry in the country. Wilhelm Rehm, member of management board, ZF Friedrichshafen, discussed his purview of the Indian market and other issues related to the industry with FE’s Anupam Chatterjee at the Hannover Messe industrial trade fair. Excerpts:

What are your plans for the Indian market?

ZF is a major automation supplier across all sectors, especially automotive and wind. I have travelled a lot to India in the last few years as I was also responsible for building the plant in Pune. In India, we have a strong portfolio on the wind power side, but we have business in other segments such as the auto sector as well. We have already opened a technology centre in India in Hyderabad last year, where will build up an engineering centre that will have 2,500 engineers by 2020. India for us is a huge opportunity for the future. This shows how important India is as a future market for us. At our Pune plant, we are producing various transmission systems and other components.

How is the Indian market for wind equipment distinct from other markets?

India is a huge market that is growing fast, but the nature of the market is different from other countries. There is a demand for products oriented on technology, but I would also say that the working environment there plays a solid ground for furthering future collaborations. The country is very much driven by innovation, but low costs also play a major role. The demand is more for low-tech product compared with their high-tech counterparts. We at ZF are learning to develop low-cost products to cater to the demands and needs of the Indian market. Increase in investments in India would be driven by the number of orders we receive, in all areas.

How are equipment suppliers coping up with the changes in the wind energy sector in the country?

Our Coimbatore plant, with about 600 employees, has been supplying technology and component to the wind industry. Six-seven months back there was a lull in orders after prices fell following the introduction of the competitive bidding regime in renewable energy. But the orders are coming back as the country is moving towards attaining the target of 175 GW by 2022. For suppliers, the economic situation is not at its best because on the customers’ side the tariffs are falling, while on the other hand, raw material, that is, steel prices, are rising. We have to find a way out of this situation. I am not a friend of government policies because at the end of the day it is the market which has to decide its competitiveness on their own.

What do you think about the trend of transition towards electric vehicles?

Two years ago, we had built a separate e-mobility division, dedicated to the development of technologies for electric vehicles. Every company must go through such disruptive phases with changes in technology. We had been prepared for this from as early as 2012, when we had charted our strategy for 2025. Everything that is happening had been taken into consideration back then. Today we are serving both conventional car technologies as well as hybrid and electric technology.

(Travel for this Q&A was sponsored by ZF Friedrichshafen AG)

Read more: ‘We are learning to develop low-cost products...

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