ICICI-Videocon: The curious link between Essar co-founder's son-in-law and Deepak Kochhar

In what will have a bearing on the ongoing ICICI-Videocon-Deepak Kochhar investigations, fresh India links have emerged with Firstland Holdings Limited, the mysterious privately held Mauritius-based investment vehicle that injected the first lot of Rs 325 crore into Deepak Kochhar's NuPower Renewables.

Firstland Holdings is promoted by Nishant Kanodia, the son-in-law of Essar Group chairman Ravi Ruia. The connection surfaced after records showed that Firstland also got approval from the then FIPB to invest in Mumbai-based privately held company NSK Holdings, which was incorporated on June 6, 2008. Within 20 days of its incorporation, on June 26, 2008, NSK Holdings received the FIPB approval for investment of $42.84 million (equal to Rs 214.5 crore at prevailing exchange rates) from Mauritius-based Firstland Holdings. Firstland Holdings Limited, Mauritius itself was incorporated just six months prior on December 28, 2007. NSK's paid up capital on the date of the FIPB approval was barely Rs 1 lakh although it had an authorised capital of Rs 2 crore. The FIPB approval says Firstland would own 100 per cent foreign equity in NSK Holdings.

NSK Holdings belongs to Mumbai-based Nishant Yogendra Kanodia and Yogendra Surajmal Kanodia who run the Matix group, including IT/business process management firm Datamatics. NSK claims to be in the business of financial intermediation, except insurance and pension funding. However, it appears it is no more than an investment and holding company as its 2016-17 annual report has reported zero revenue.

Kanodias' Matix Group is investing in a 3 million tonne per annum Coal Bed Methane based greenfield ammonia- urea complex at Panagarh, in West Bengal under Matix Fertilisers And Chemicals. The first phase of 1.3 mtpa has been commissioned. An email response from Yogendra Kanodia's office says: "Firstland is promoted by Nishant Kanodia. In an unconnected transaction, Firstland has promoted and is the majority shareholder of Matix Fertilisers. There is no relationship whatsoever between Matix Fertilisers and NuPower."

In 2016, investor and whistleblower Arvind Gupta had alleged a quid pro quo in ICICI Bank's Rs 3,250 crore plus Rs 660 crore loans to Venugopal Dhoot-owned Videocon Industries when an identical 10 per cent foreign funding (Rs 325 crore and Rs 66 crore) made its way to ICICI Bank CEO & MD Chanda Kochhar's husband Deepak Kochhar's company NuPower Renewables. "Firstland had made investments into NuPower in 2010 and 2011. This investment was sold in 2013 to a private equity fund and Firstland recovered its full investment. Firstland has had no dealings with NuPower since the sale. All the investments listed above have been fully disclosed in regulatory filings," says the response from Kanodia's office. Deepak Kochhar and Videocon promoters Dhoots had together set up a 50:50 JV NuPower Renewables in 2008. These revelations led to allegations of propriety and conflict of interest. "Chanda did not know when I set up NuPower. I knew Dhoot through social circles. I told her when Dhoot exited," Deepak told India Today TV.

Besides, the alleged quid pro quo and impropriety in the ICICI-Videocon case, one of the angles being investigated by tax and investigative authorities is whether the investment at all amounts to money laundering and round-tripping.

Any investigation of NuPower Renewables via Firstland Holdings will now have to also account for any links between the two as well as between Kanodias and the Kochhars.

Yogendra Kanodia is also an alumnus of Jamnalal Bajaj Institute of Management Studies, Mumbai where Deepak Kochhar graduated. ICICI has an existing relationship with Kanodias. Group firm Datamatics Global Services Limited was awarded the "Best Service Provider" at ICICI Prudential Annual TATVA Awards in April, 2017. Kanodia said, "None of the Kanodia group companies have any loans from ICICI".

As of March 31, 2017, NSK Holdings had unsecured long term borrowings in the form of bonds and debentures of Rs 150 crore, up 30 crore since the previous fiscal. It also had current assets in the form of short term loans and advances given to the extent of Rs 150 crore, up 50 crore since the previous fiscal. Interestingly, in fiscal 2016-17, the company's cash and cash equivalents fell drastically to barely Rs 87,522 from Rs 20 crore in the previous fiscal. It also reported transactions worth Rs 150 crore under AS 18 which is the accounting standard for disclosure of: Related party relationships; and transactions between a reporting enterprise and its related parties.

Yogendra Kanodia's profile on the Matix Group website claims he's a director in Datamatics group. However, the Datamatics group's board of directors does not feature his name. Datamatics's founder and chairman is Lalit Surajmal Kanodia, who not just founded Datamatics in 1975 but was also involved in setting up of Tata Consultancy Services in 1967. Lalit Kanodia, however, is a board of director in the Matix group. Emails sent to Lalit Kanodia's office also remained unanswered.

He serves as the Chief Mentor at Datamatics. Lalit Kanodia is currently President of IMC chamber of commerce & industry and Indo American Chamber of Commerce (IACC). He's also been an executive member of NASSCOM. He was also the Honorary Consul General of Chile in Mumbai between 2002 and 2014.

Curiously, the two companies with identical names 'Firstland Holdings Limited' were born a decade apart in Hong Kong and Mauritius. They could hold the key to whether Deepak Kochhar, the husband of ICICI Bank CEO & MD Chanda Kochhar, was at all the alleged beneficiary of 10 per cent of that loan, as claimed by investor/whistleblower Arvind Gupta. Deepak Kochhar as well as Videocon Industries have denied any quid pro quo.

'Firstland Holdings' has questionable antecedents. As far back as November 27, 2002, Bank of China (Hong Kong) filed a petition to wind up Firstland Holdings Limited, Hong Kong (company registration no. 0585823). It was set up way back on January 6, 1997. The company was 'Dissolved' on grounds of 'Compulsory Winding Up' by the High Court of Hong Kong on 26 August,2005.

On December 28, 2007, nearly 2 years after the Hong Kong-based Firstland Holdings Limited was wound up, a company by an identical name 'Firstland Holdings Limited' was set up, this time in Mauritius jurisdiction. It was incorporated with registration number C076560 by the Corporate And Business Registration Department of Mauritius.

Firstland Holdings, Mauritius invested funds aggregating Rs 325 crore (10% of the loan amount) into Deepak Kochhar's NuPower Renewables in the form of compulsorily convertible preference shares.

Who owned Firstland Holdings, Hong Kong and why it went into bankruptcy may hold answers to why Firstland Mauritius came into being.

It isn't clear whether the identical names of the two companies is mere co-incidence or both belong to the same owners/promoters--Kanodias. Since both these companies were registered as 'private' at Hong Kong and Mauritius Registrars, their ownership is not publicly available.

Corporate ownership and identity is often shrouded in layers of holding structures across multiple geographies to camouflage real ownership of funds or tax avoidance. Routing ownership or investment via multiple geographies makes it answerable to various jurisdictions and equally complex and lengthy legal procedures. This makes it much more difficult to peel open the corporate veil.

Starting and shutting businesses in various countries is a standard tactic to create investigating dead-ends. Investigating agencies have a difficult task lifting this corporate veil.