ICICI Bank to probe charges against CEO Chanda Kochhar
The allegations are related to ‘conflict of interest’ over time and ‘quid pro quo’ in course of ICICI Bank CEO Chanda Kochhar’s work in dealing with the Videocon loan case
Mumbai: ICICI Bank Ltd on Wednesday said it will institute a fresh enquiry into an alleged nexus between the husband of chief executive Chanda Kochhar and Videocon Group chairman Venugopal Dhoot over a loan extended by the bank to the conglomerate.
The bank’s board, following a meeting on 29 May, decided that the probe will be headed by an independent and credible person and will verify the charges made by an anonymous whistle-blower that came to light after the bank’s 7 May board meeting.
The investigation will verify charges of impropriety, if any, in the lending decisions of the bank and Kochhar as alleged by the whistle-blower. ICICI Bank’s decision to institute a fresh enquiry comes after the board met some investors on Tuesday to allay their concerns.
The probe will specifically look at allegations that Kochhar breached the bank’s “code of conduct”, violated regulations on “conflict of interest” and favoured certain borrowers, the bank said in an exchange filing.
On Tuesday, at a conference on financial services in Mumbai, the bank’s board met investors including APG Asset Management, Marshall Wace Asia Ltd, Geosphere Capital Management, Amansa Capital, Fidelity International Investment Management and Morgan Stanley Asset Management to address their concerns.
On 12 April, Mint first reported that ICICI Bank’s board was preparing a plan that includes more public disclosures related to conflict-of-interest allegations against Kochhar to restore shareholders’ confidence in the bank.
On Wednesday, the bank said the scope of the fresh enquiry will include all relevant matters arising out of the whistle-blower’s allegations. During the course of the examination, the bank will help the enquiry team with forensics/email reviews and records of statements of relevant personnel and so on, if required.
“The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final close,” the bank said in the exchange filing.
On 28 March, ICICI Bank’s board had issued a statement reposing its confidence in the corporate governance of the lender and the integrity of Kochhar.
The board said it was aware of a 2016 Reserve Bank of India (RBI) probe on this issue and considered that information before giving Kochhar a clean chit.
RBI had initiated the probe after another whistle-blower alleged conflict of interest, said a person directly aware of the bank’s board decisions.
Kochhar has been in the eye of a storm over granting a Rs3,250 crore loan to Videocon group companies in 2012 as part of a consortium, as her husband had business dealings with the Dhoot-led conglomerate.
In its probe, RBI had found no evidence of reciprocal benefit, stating the allegation “could not be conclusively established”.
“In keeping with the whistle-blower policy, board has mandated its audit committee to take all further actions in the matter to operationalize this decision—including in particular, appointment of an independent and credible person as head of the enquiry, determining the terms of reference of the enquiry, the period which will be covered by the enquiry etc.,” the bank told exchanges.
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