Mumbai: Directors on ICICI Bank Ltd’s nomination panel are readying a succession plan for the chief executive officer’s (CEO’s) post as incumbent Chanda Kochhar’s tenure has been clouded by investigations related to loans made to Videocon Group, two people directly aware of the development said.
The nomination panel first discussed a fortnight ago plans to assess potential candidates to succeed Kochhar when her term ends in March 2019.
“Although the names of the potential candidates for new CEO have not been finalized, the committee has kept a succession plan ready," one of the two people said, requesting anonymity. “The committee may appoint a headhunting firm for shortlisting a new CEO. The terms of appointment have been discussed."
Once the panel shortlists the names, the proposal for appointment of a new CEO will be placed before the bank’s board, the person said, adding that the board and the Reserve Bank of India will then have to approve the name.
A query emailed to ICICI Bank seeking comments on the development did not elicit any response till the time of going to press.
Independent director Dileep Choksi heads the board’s governance, remuneration and nomination committee. ICICI Bank chairman M.K. Sharma, and director V.K. Sharma, who is also chairman of Life Insurance Corp. of India, are the other two members of the panel.
Kochhar’s leadership has come under a cloud after allegations of a conflict of interest over loans made to Videocon Group, whose chairman Venugopal Dhoot had business links with her husband Deepak Kochhar. The allegations first surfaced in 2016, but the bank’s board had given her a clean chit following an internal investigation.
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The ICICI Bank’s credit committee, with Kochhar as one of the members, had granted a Rs3,250 crore loan to Videocon Group firms in 2012 as part of a consortium.
On 30 May, the bank’s board ordered an independent inquiry following a complaint by an anonymous whistleblower against Chanda Kochhar. The probe will look at allegations that Kochhar breached the bank’s “code of conduct", violated regulations on “conflict of interest" and favoured certain borrowers.
The Securities and Exchange Board of India (Sebi) has already begun a forensic audit into the dealings of ICICI Bank since Kochhar’s appointment as the CEO on 1 May 2009. On 10 June, PTI had reported that US markets regulator Securities and Exchange Commission, too, has started a probe into the bank’s dealings.
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The fresh enquiry will include all relevant matters arising out of the whistleblower’s allegations. “The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final close," the bank had said in an exchange filing on 30 May.
Some independent directors on the board of ICICI Bank have also discussed a succession plan with some members of the bank’s nomination committee if Kochhar decides to quit prematurely or if any wrongdoing is discovered in the course of the independent enquiry.