Acting on the complaint of an anonymous whistle blower, the board of the ICICI Bank has said it will conduct an independent enquiry, into allegations of breach of code of conduct and conflict of interest, against Managing Director and Chief Executive Chanda Kochhar. This decision comes on the back of Securities and Exchange Board of India (SEBI) serving a notice to the bank and Kochhar.
The allegations of wrongdoing pertain to loans extended by ICICI Bank to the Videocon group. The point of contention was that Videocon in turn had business relations with NuPower Renewables, owned by Chanda Kochhar’s husband Deepak Kochhar.
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The Central Bureau of Investigation (CBI) and SEBI are already conducting separate investigations on the violation of norms by Kochhar. The CBI has launched a preliminary investigation into the Rs 32.50 billion loan that ICICI Bank had extended to Videocon in 2012 and the role of Deepak Kochhar in sacntioning of the loan. Reports have alleged that Videocon Chairman Venugopal Dhoot invested Rs 640 million in NuPower Renewables.
The enquiry will be headed by an “independent and credible person”, the bank said in a filing to the stock exchanges. The scope of the enquiry will be comprehensive and involve examination of facts as well as use of forensics and of statements of relevant persons. “The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final course,” it added.
The bank’s board has mandated its audit committee to take further actions, including appointing the head of enquiry and determining the terms of reference of the enquiry. It will assist the head of enquiry with the required legal and professional support.
While the Videocon-NuPower deal came into the limelight only in March this year, it was first brought to notice two years ago in 2016 when an ICICI shareholder, Arvind Gupta, alleged that the bank extended loans to the Videocon group despite their “dubious track record of using fresh borrowings to service their mounting debts.” “A corrupt nexus between ICICI Bank’s chief Chanda Kochhar’s dealings with Videocon Group chief Venugopal Dhoot and his family is well established,” he had written in a letter addressed to Prime Minister Narendra Modi dated March 15, 2016.
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ICICI Bank has denied any wrongdoing and said it was part of a consortium of lenders that extended the facility to Videocon. Earlier, the bank had clarified that none of investors of NuPower Renewables was a borrower of ICICI Bank.
ICICI Bank Chairman M K Sharma had said in March that the board had full confidence in Chanda Kochhar and ruled out any quid pro quo as alleged with regard to certain loan given to the Videocon group. The bank has started the search for a successor to Sharma whose term ends on June 30, 2018.
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