ICICI board divided over retaining Chanda Kochhar as CEO

The board may meet as early as this week to consider its next course of action. Kochhar’s current tenure as CEO is set to end on March 31, 2019.

Published: 09th April 2018 03:07 PM  |   Last Updated: 09th April 2018 03:23 PM   |  A+A-

ICICI Bank MD and CEO Chanda Kochhar (File Photo | PTI)

By Online Desk

The board of ICICI Bank Ltd, which earlier expressed full faith in Chanda Kochhar, is reportedly divided over whether to ask her to step down as Chief Executive Officer. 

According to Hindustan Times (HT), at least few outside directors are against Kochhar continuing her role, as federal authorities investigate her, her husband's (Deepak Kochhar) and brother-in-law's (Rajiv Kochhar) alleged involvement over loans made to Videocon group. The board may convene this week to consider its next move. Kochhar’s current tenure as CEO is set to end on March 31, 2019.

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According to a March 28 filing, CICI Bank board reviewed the bank's internal processes for credit approval and found them robust. The 12 member board headed by chairman M. K. Sharma expressed "full faith" and "confidence" in Kochhar and said there was “no question” of any quid pro quo, nepotism or conflict of interest.

ICICI shares were down 0.86 per cent at 10:41 am on Monday, on track for its biggest fall in a week, after earlier declining as much as 2.2 per cent. ICICI stood as the worst performer among private-sector peers on the 10-member gauge since May 2009 and has a bad-loan ratio, highest among its peers, HT reported.

“If the CEO has to step down, the shares might see a knee-jerk fall and then recover from there on,” said Gaurang Shah, head investment strategist at Geojit Financial Services Ltd. told Bloomberg.

“Allegations are regarding transactions which have happened in the past and the market has already priced in most of the risks that could come from it,” he added.

CBI recently commenced a preliminary enquiry into allegations of corruption and nepotism regarding the loans given to the Videocon Group, with which Deepak Kochhar had a business partnership. According to sources, the CBI has got evidence suggesting Rajiv was involved in restructuring the debt of the Videocon Group.

(With input from agencies)


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