All eyes on Chanda Kochhar as ICICI board meets
New Delhi: ICICI Bank Ltd’s shareholders expect its board to clarify on conflict-of-interest allegations raised against its chief executive Chanda Kochhar at its Monday meeting to approve the lender’s March quarter earnings, executives from three top asset management companies said.
“We want clarity on the issue of conflict of interest and a succession plan from the board,” said a head of a mutual fund house, one of the three cited above. The person declined to be named given the sensitivity of the issue.
“We want clarity on the kind of disclosures made by the bank CEO,” said the second of the three people, also requesting anonymity.
In early March, the Central Bureau of Investigation registered a preliminary enquiry against Chanda Kochhar’s husband Deepak and businessman Venugopal Dhoot to verify alleged conflict of interest in a Rs3,250 crore loan made by ICICI Bank to Dhoot’s Videocon group. ICICI Bank had extended the loan as part of a Rs40,000 crore loan by a consortium of 20 banks in 2012. Separately, the Securities and Exchange Board of India has also asked ICICI Bank to clarify on reports of this alleged corporate governance breach. The tax department had in April issued notices to Deepak Kochhar to look into the flow of about Rs325 crore from two Mauritius-based firms to NuPower Renewables, which he once co-owned with Dhoot.
“The bank’s board meeting on 7 May will consider the approval of the audited annual accounts for the financial year ended 31 March 2018 and discuss other routine matters,” a spokesperson for ICICI Bank said, adding that the allegations are not part of the agenda and are baseless and speculative in nature.
The bank has consistently denied the allegations and its board has defended its CEO. On 28 March, the board issued a statement reposing confidence in the corporate governance of the lender and the integrity of Chanda Kochhar.
On 12 April, Mint reported that the bank’s board is planning to address concerns of its shareholders.
With the central bank on 12 February withdrawing a host of restructuring schemes and setting a 180-day deadline for bad loan resolution, the bank may see a reversal in the trend of falling loan slippages, analysts said.
Analysts expect a rise in bad loans and provisioning for accounts referred under the bankruptcy code. According to a poll of 18 analysts by Bloomberg, the bank is expected to post a Rs1,060 crore profit for the March quarter, roughly half of that a year ago.
Alekh Archana contributed to this story.
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