A special court in Delhi has taken cognisance of a prosecution complaint filed by the Enforcement Directorate (ED) against industrialist Venugopal Dhoot and 12 other individuals and entities in connection with alleged money laundering linked to the Videocon Mozambique oil deal. The court has issued notices to all 13 accused after examining the complaint, which was filed in December 2024 under provisions of the Prevention of Money Laundering Act (PMLA).
The ED investigation originates from a First Information Report registered by the Central Bureau of Investigation (CBI) in June 2020. According to the agency, foreign currency loan facilities obtained by the Videocon Group were systematically diverted away from their approved purposes, which were meant for the development and refinancing of overseas oil and gas assets.
Investigators stated that the loans were backed by a standby letter of credit sanctioned by a consortium of lenders, including Indian banks led by the State Bank of India. The ED alleged that the diversion of funds occurred under the overall control and direction of the group’s promoters, with active participation from overseas subsidiaries and intermediaries associated with the Videocon Group.
As per the agency’s findings, the alleged scheme involved routing loan proceeds through Videocon Hydrocarbon Holdings Limited and its foreign oil and gas subsidiaries. The funds were then layered through multiple overseas entities engaged in activities unrelated to the sanctioned oil and gas operations. Authorities claim that complex financial mechanisms such as circular transactions, adjustment of export advances, inter-company loans, and investments were used to move and disguise the money.
The ED further alleged that a substantial portion of these funds was routed back into India through Videocon Industries Limited and its domestic group companies. These inflows were allegedly disguised as legitimate financial transactions, including export advances, loan repayments, equity infusions, and investments, thereby concealing the origin of the funds and projecting them as lawful receipts.
According to the investigation, approximately USD 2.02 billion out of the total USD 4.54 billion loan facility was diverted for purposes unrelated to the sanctioned objectives. The agency stated that the funds were allegedly used to finance non-oil businesses, create corporate and personal assets, and meet unrelated expenses.
The financial stress resulting from these transactions eventually led to Videocon Industries Limited and its group companies being classified as non-performing assets in 2018. Banks have since filed claims amounting to Rs 61,773.02 crore, including an NPA exposure of Rs 23,647.12 crore linked specifically to the standby letter of credit facility. The case will now proceed further as the court examines the allegations under the money-laundering framework.
