MUMBAI: Nearly a month after Securities and Exchange Board of India (SEBI) pulled its trigger on ICICI Bank, the private lender is yet to respond to the markets regulator.
Last month, SEBI initiated adjudication proceedings against the bank and its MD & CEO Chanda Kochhar in the controversial case of loans given to Videocon Group.
The move forced the bank’s board, which extended full support to Kochhar, to re-think and rope in an insider — Sandip Bakshi — as interim COO, initiate an independent probe into the allegations and above all asking Kochhar to go on an indefinite leave.
“We are yet to receive reply from the ICICI Bank,” confirmed Ajay Tyagi, Chairman, SEBI on Thursday.
The regulator’s notice was based on information furnished by the bank and Kochhar to ‘diverse queries’ concerning the dealings between the bank and Videocon and NuPower, an entity in which Kochhar’s spouse Deepak Kochhar has economic interests.
As per SEBI norms, while holding an inquiry, the adjudicating officer can summon not only Chanda Kochhar, but also those acquainted with the facts and circumstances of the case to give evidence or to produce any document relevant to the matter. The officer can impose penalties, the quantum of which will be based on the amount of disproportionate gains or the amount of losses caused to investors and based on the repetitive nature of the default.
On its part, the bank also initiated an independent enquiry, to be headed by Justice B N Sriskrishna, to probe the allegations leveled by whistleblower Arvind Gupta accusing her of quid pro quo and not adhering to ‘code of conduct.’ The CBI too is conducting an investigation and a preliminary report is expected soon.
Meanwhile, shares of ICICI Bank rallied more than 2 per cent on Thursday on reports that the private sector lender may appoint former Bank of Baroda CMD MD Mallya as a successor to the current ICICI Bank Chairman MK Sharma when his term ends on June, 30.
ICICI bank ‘fraud’
The cases under scanner include the bank’s Rs 3,250 crore loan to Videocon Group in 2012 and the involvement of Kochhar family members in restructuring of the loan.
Kochhar and her family members are facing allegations of quid pro quo and conflict of interest with respect to a loan extended to certain entities.
Besides Sebi, various other agencies, including the CBI, are looking into alleged lapses involving Kochhar and her family.