One question is why the hands of law reached Videocon owner Dhoot so late


- Venugopal Dhoot, who started the country's largest consumer electronics company from a scooter dealer, is now in jail.

- Venugopal Dhoot, who freely donates to political parties along with Shiv Sena, is not getting even a penny now against the billions of debts.

Videocon group founder Venugopal Dhoot has been arrested by the Central Bureau of Investigation (CBI) last week. Once India's leading manufacturer of consumer electronics (appliances such as televisions, audio systems and washing machines), the empire of this business tycoon, who was counted among the country's richest men, has now crumbled. The Indian companies of the Videocon group have a debt of Rs.64,000 crore and have been under proceedings under the Insolvency and Bankruptcy Code (IBC) for three years as it has not been repaid. The procedure and its complications are a different story.

The case in which the CBI has arrested Venugopal Dhoot is alleging wrongdoing with ICIC Bank. Chanda Kochhar and her husband Deepak Kochhar, who were once the most respected figures in Indian banking, are also involved in this case. All three are in jail. The biggest surprise is why Videocon has escaped jail so far after several complaints and cases surfaced regarding bankruptcy proceedings and financial dealings in foreign companies. How did the business of this Venugopal Dhoot expand?

Success in business

Having taken over his father's business as a Bajaj Auto dealer, Venugopal, who holds a degree in electronics engineering, founded the Videocon group in 1984. In the nineties, after training for a year in the Japanese electronics business, he started his own business by making color televisions cheaper than imported televisions in India as well.

Like other entrepreneurs, Venugopal wanted to conquer the world, so besides electronics, he expanded into areas like cable television, direct-to-home TV service, telecom, oil and gas. But profit was not getting in the other business, all the profit and earnings were concentrated on the electronics business.

It was at this time that the Supreme Court canceled all telecom licenses in the 2G spectrum scam and Videocon suffered a huge financial loss. On the other hand, with the arrival of Chinese and Korean companies in consumer electronics, the competition became more intense, and the debt slowly started to increase with Videocon's earnings.

Benefit of political class

When Venugopal Dhoot's coin was in circulation, he held the responsibility of chairing Assocham, the country's top industries lobby. His brother Rajkumar Dhoot was elected as Rajya Sabha member from Maharashtra thrice on Shiv Sena ticket.

Apart from this, the company has also been giving donations to various political parties. In 2014-15, the company gave a total of Rs 5.50 crore to Shiv Sena and Sharad Pawar's NCP. In the year 2013-14, he got Rs 11 crore from BJP and Rs. Donated 23 crores.

Malpractice cases against Videocon abroad too

Not only in India but also in the world there are two cases which have put heavy financial burden on Videocon. The group had a penchant for hijacking tungsten and tin mines in Uganda. The company stopped giving mining rights to local people by partnering them. In this situation, the partners filed a case in the Ugandan court in which an order was made to pay 21 million dollars plus six percent annual interest. The court noted that there was breach of contract by Venugopal Dhoot and Videocon and forfeited the mining license of the partners. Italy's Intesa Saopaolo Bank had filed a case against the group's pet company for liquidation in the Bombay High Court for non-return of Rs 259 crore. The High Court ruled in favor of the bank and asked Videocon to pay the amount. Videocon has appealed to the Supreme Court against this order, but the Supreme Court has deposited a deposit of Rs.121 crore and started the hearing of the case.

Banks will get only five percent return in case of bankruptcy?

After bankruptcy proceedings were initiated against the Videocon group, various creditors owed the company a total of Rs 64,000 crore. After a complicated process and a long battle, the Vedanta group's offer of Twin Star for Rs 2,692 crore was cleared by the National Company Law Tribunal. However, the offer was stayed by the Appellate Tribunal and then the Supreme Court after protests by banks and financial institutions. The thing is that Videocon has a 22 percent stake in the Reva field in the Krishna Godavari basin. The Rewa field produces crude and has government-owned ONGC and Anil Agarwal's Vedanta among other partners. Therefore, if Vedanta buys this Videocon, it is being alleged that this gas field will also be handed over without paying a single rupee.

What is the case in which the arrest has been made?

The arrest of Videocon founder Dhoot, former managing director of ICIC Bank Chanda Kochhar and her husband Deepak Kochhar is a classic case of financial malfeasance or corruption by an official holding a prominent post in the banking sector. ICICI Bank extended a loan of around Rs 3,250 crore to Videocon.

Within a few days of receiving this loan, a fund of Rs.64 crore from another company of Videocon was received by Deepak Kochhar's NewPower Renewable Company. The investment on behalf of Videocon came from a company called Supreme Energy Private Limited and this company was later transferred to a trust of Deepak Kochhar. That is, it is alleged that Chanda Kochhar's husband's business was benefited by the bribe of the loan received by Videocon.

Dhoot's three companies in tax havens

Three companies of the Videocon group are located in tax havens (ie countries where no tax is imposed on corporate profits or personal income). Out of which two companies are located in Cayman Islands and one in Mauritius. An additional loan of Rs.20,500 crore has been given to these companies for oil and gas.

Dhoot went to Japan and studied color TV production

Venugopal Dhoot's story is a great example of what a young man from an ordinary family can do with determination. The Dhoot family hails from Ahmednagar district of Maharashtra. Videocon was founded in 1984 by Nandalal Madhavalal Dhoot, father of Venugopal. Nandlal had his own cotton ginning mill and also had a large grain business.

However, Nandalal's eldest son Venugopal Dhoot had something else in mind. Venugopal Dhoot studied engineering at Pune University. Color TV was broadcast for the first time in India in 1982 when the Asian Games were held. Venugopal realized that the era of color TV was about to come, so he took the TV dealership from his father and formed Videocon Company.

Venugopal's intention was to make color TV at that time. This is why Venugopal left for Japan in 1984, the same year Videocon was established. After working for a year in electronics companies in Japan, I understood the intricacies of products including TVs. While returning from Japan in 1986, Dhoot entered into an agreement with Toshiba to manufacture color TVs. After coming to India, he formed Videocon International Company and started making color TVs.

When Dhoot announced to make one lakh color TVs a year, everyone laughed at him because India was not producing at that level. Dhoot stunned everyone by making one lakh TVs last year.


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