Regulator serves show cause notice to Chanda Kochhar; sets July 10 deadline

The stock market regulator has asked Chanda Kochhar, the Chief Executive Officer of ICICI Bank, to reply to a show cause notice over alleged violation of listing disclosure norms by July 10.

Kochhar and the bank had missed the June 7 deadline and sought more time to respond to the notice. Now the regulator – Security and Exchange Board of India (SEBI) – has set a new deadline, Business Standard newspaper has reported.

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The regulator in its notice had alleged violations of code of conduct because Kochhar reportedly had not disclosed conflict of interest arising out of alleged business deals between ICICI Bank, Videocon and NuPower Renewables, the latter of which was led by her husband Deepak. As a listed company ICICI is bound by the disclosure norms laid by the SEBI.

“The notice, however, did not have adequate documents to support the allegations. Before filing an appropriate reply, evidence of alleged contravention of securities laws need to be examined by the recipients,” the report quoted a source as saying.

Meanwhile, the bank has written to the regulator, requesting it to share documents on the basis of which the notice was served.

SEBI had sent a 12-page show cause notice to ICICI Bank and Kochhar on May 23 as their key managerial staff are required to follow a code of conduct and should comply with all norms.

The regulator had initiated a preliminary inquiry into whether the bank’s board was aware of the conflict of interest on April 17. According to the adjudication rules, the market regulator can pass an ex-parte order against the entity if the aggrieved party did not respond to SEBI in the stipulated time.

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