Chanda Kochhar, Along With 10 Others, Booked For ‘Cheating’ Tomato Paste Company

Dating back to 2009, the case became prominent recently after the Patiala House Court issued an order on December 9, 2023, instructing the Delhi Police to begin an investigation

The FIR was lodged by Shammi Ahluwalia, Director, P&R Overseas Pvt Ltd (Tomato Magic), and stated that the accused allegedly conspired to give a ‘Letter of Credit’ (LoC) from a foreign bank as a genuine document.

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Former ICICI Bank managing director and CEO, Chanda Kochhar, found herself embroiled in a new legal controversy as a new case was registered against her in New Delhi accusing Kochhar and ten others of cheating a tomato paste company, resulting in a loss of Rs 27 crore. 

Dating back to 2009, the case became prominent recently after the Patiala House Court issued an order on December 9, 2023, instructing the Delhi Police to begin an investigation, reported IANS. This was followed by the Economic Offence Wing of the Delhi Police registering an FIR in the case on December 20, 2023, including allegations of cheating and criminal conspiracy.

The FIR named Chanda Kochhar, Sandeep Bakshi (CEO and MD, ICICI Bank), Vijay Zagade (ICICI Bank’s ex-manager), unnamed officials of ICICI Bank’s Global Trade Services unit in Mumbai, Atul Kumar Goel (MD and  CEO, Punjab National Bank), K K Bordia (ex-GM, Oriental Bank of Commerce), Akhila Sinha (AGM PNB and then Branch Head of OBC), Manoj Saxena (AGM PNB and then Branch Head of OBC), and K K Bhatia (ex-chief manager, OBC). 

The FIR was lodged by Shammi Ahluwalia, Director, P&R Overseas Pvt Ltd (Tomato Magic), and stated that the accused allegedly conspired to give a ‘Letter of Credit’ (LoC) from a foreign bank as a genuine document. The LoC is important for an export order of tomato paste, and was purportedly issued by the Royal Bank of Scotland (RBS), however, it was later revealed to be from a local Russian Bank called RBS Alliance, known for its dubious reputation. 

The report said, “ICICI Bank fraudulently authenticated the LoC as issued by Royal Bank of Scotland, knowing fully well that the LoC (L/C) was from a local Russian Bank: RBS Alliance. The said LoC was amended thrice, but on all these occasions, ICICI repeatedly committed folly. ICICI Bank which in this case is the Advising Bank and its officers were to enquire whether the L/C being offered was authentic and issued by a bonafide banking entity. As will be stated later, the L/C was a complete fraud and forged but was verified to be authentic and legal by ICICI Bank in league and in conspiracy with the L/C issuing bank.”

The report further mentioned that the complainant firm got the L/C purportedly issued by Royal Bank of Scotland, a famous ‘A’ class global bank of good reputation. “It was categorically stated in the said Credit that the same is subject to terms and conditions as contained in Uniform Customs and Practise for Documentary Credits… the L/C was received through ICICI Bank, Mumbai, being the Advising Bank, hired by the actual L/C issuing Bank, RBS Alliance, Moscow, which did not enjoy good reputation in honouring its documentary credits,” the report read.

Notably, Tomato Magic, the complainant, received an export order from a Russian buyer for 1,000 metric tonnes of Chinese tomato paste. The order was initially valued at $10 lakh and later increased to $18.48 lakh for an extra supply of Iranian-origin tomato paste. 

To manage payment risks, the order was dependent on a 100 per cent irrevocable LoC issued by an ‘A’ class bank, with ICICI Bank as the advising bank for the order. The following wrongful authentication of the LoC by ICICI Bank allegedly resulted in a loss of Rs 27.66 crore for Tomato Magic, the complainant said.

On December 12, the Supreme Court adjourned the hearing on the CBI’s petition challenging the interim bail given by the Bombay High Court to Kochhar in the alleged Videocon loan fraud case, till January 3, 2024.