Dhoot’s downfall: From business empire to jail cell

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MUMBAI: Former ICICI Bank CEO Chanda Kochhar had ended up generating headlines over what the CBI alleged was a quid pro quo deal with Videocon, but the company’s promoter and chairman Venugopal Dhoot managed to maintain a low profile.
That was until Monday, when the CBI arrested the head of what was once among India’s largest conglomerates with interests in consumer durables, entertainment, power and energy. The trigger for Dhoot’s (71) arrest was a complaint by the investigating authorities that the industrialist invested money in Chanda Kochhar’s husband Deepak Kochhar’s business to get out-of-turn loans.
In recent years, barring insolvency proceedings, Dhoot managed to stay below the radar. Not many would remember that Videocon was one of the largest colour picture tube manufacturers in the world and the largest consumer durables company in the country, giving Samsung and LG a run for their money.
Videocon Group was founded by Nandlal Madhavlal Dhoot in 1984 in Aurangabad. The senior Dhoot originally ran a sugar mill, and the family also had a Bajaj Auto dealership in Aurangabad. Nandlal was into sugarcane and cotton cultivation. The family then established Adhigam Trading to sell paper tubes, which later forayed into consumer electronics.
While the senior Dhoot enlisted all his sons — Venugopal, Rajkumar and Pradipkumar — in the family business, it was Venugopal who was responsible for scaling up Videocon’s operations following a technical tie-up with Toshiba.
Younger brother Rajkumar played statesman, getting elected to the Rajya Sabha for two terms on a Shiv Sena ticket and taking charge as president of industry body Assocham. But Venugopal was the main driver of the group, entering into manufacturing partnerships and acquiring foreign players.
As economic reforms led to a consumer boom, Dhoot scaled up operations through a series of acquisitions, including that of the Philips colour television plant in1999. In 2005, Videocon took over the colour television tube manufacturing business of global giant Thomson and, within weeks, acquired Electrolux Kelvinator. The group also signed a deal to acquire Korea’s debt-burdened Daewoo Electronics, taking the fight to the home market of the Koreans.
The inflection point for the group came when it started diversifying outside its core area of consumer durables. When the government began selling oil exploration blocks, Videocon was one of the few groups with the balance sheet strength to bid for large projects. The group invested in oil & gas fields in Brazil, Indonesia, Mozambique among other parts of the world.

When the government started issuing telecom licences under the first-comefirst-served policy in 2008, Videocon was one of the successful applicants. It even drew adverse observations from the CAG for “jumping the queue”. Trouble started for the group when the controversy erupted over 2G licences and the Supreme Court cancelled the allocations. For the group, this was a big hit as it had invested several thousand crores in the business. At the same time, the oil & gas business in Brazil got stuck after a change of government there.
Besides manufacturing capabilities, Dhoot also came under the limelight for his association with Bollywood, hiring celebrities as brand ambassadors and setting up television broadcaster Videocon D2H. He had also sought to acquire an IPL team.
The inability to service debt led to the company being downgraded and, finally, being declared a non-performing asset (NPA). With admitted claims of Rs 71,500 crore, Videocon was part of the companies that the RBI referred to banks to initiate insolvency proceedings.

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