Delhi Court Takes Cognisance of ED Complaint in Videocon Mozambique Oil Deal Case

A special court in Delhi has taken cognisance of a prosecution complaint filed by the Enforcement Directorate (ED) against industrialist Venugopal Dhoot and 12 others in connection with the Videocon Group’s Mozambique oil deal case.

The complaint, filed in December 2024 under the Prevention of Money Laundering Act (PMLA), alleges large-scale diversion of foreign loan funds.

Court Issues Notices to 13 Acccused

The court has issued notices to all 13 accused named in the money laundering case.

The ED investigation originates from a June 2020 FIR registered by the Central Bureau of Investigation (CBI).

Authorities are examining alleged financial irregularities linked to overseas oil and gas investments.

ED Allegation: Systematic Diversion of Loan Funds

According to the ED, foreign currency loans obtained by the Videocon Group were diverted from their sanctioned purpose of developing and refinancing overseas oil and gas assets.

The standby letter of credit (SBLC) for these funds was approved by a consortium of lenders led by the State Bank of India.

Investigators allege the diversion occurred under the direction of group promoters with involvement from overseas entities and intermediaries.

How the Funds Were Routed

The ED described a complex routing mechanism:

• Loan proceeds moved through Videocon Hydrocarbon Holdings Ltd (VHHL)

• Funds passed via overseas oil and gas subsidiaries

• Routed through global group entities unrelated to energy operations

• Returned to India via layered transactions

Authorities claim circular transactions, export advance adjustments, inter-company loans, and investments were used to mask the diversion.

Funds Allegedly Used for Unrelated Activities

Investigators allege the diverted funds were used for:

• Non-oil business expenses

• Investments and asset creation

• Personal and corporate financial use

The funds were allegedly reintroduced into India through Videocon Industries Ltd and related entities, disguised as legitimate inflows such as loan repayments and equity infusions.

Scale of the Alleged Diversion

The ED investigation found:

• Total loan facility: USD 4.54 billion

• Funds allegedly diverted: USD 2.02 billion

• Bank claims: Rs 61,773.02 crore

• SBLC-related NPAs: Rs 23,647.12 crore

Videocon Industries and its group firms were classified as non-performing assets (NPAs) in 2018.

Legal and Financial Implications

The case highlights ongoing scrutiny of large corporate borrowings and the alleged misuse of overseas funding structures.

Under the PMLA, authorities can investigate money laundering, attach assets, and pursue prosecution if illicit fund diversion is established.

Further proceedings will determine the liability of the accused and the recovery of diverted funds.