MUMBAI: Pressure seems to be mounting on ICICI Bank MD & CEO Chanda Kochhar, who has been accused of quid pro quo deals with the Videocon Group as well as conflict of interest as the private lender on Wednesday ordered an ‘independent probe’ into the allegations.
The bank’s move is notable because barely a month ago, it had given a clean chit to Kochhar saying there was no truth in the allegations. So what’s changed in between? According to sources, a recent notice by Sebi to ICICI Bank on the bank’s dealings with Videocon Group and NuPower may be the trigger.
In an exchange filing, ICICI Bank said on Wednesday that the enquiry will be headed by an ‘independent and credible person’. “The scope of enquiry would be comprehensive and include all relevant matters arising out of and in the course of examination of the facts and wherever warranted, use of forensics/email reviews and recordal of statements of relevant personnel etc,” it added.
The bank, however, didn’t disclose much except that its board mandated the audit committee to appoint the head of enquiry, determine its terms of reference and period covered. The committee will also help with the required independent legal and other professional support.
“An independent probe should have been conducted much before. The timing of this proposed enquiry is questionable and could be due to the notice from Sebi,” said Arvind Gupta who had flagged the possible quid pro quo in ICICI Bank’s loans to Videocon way back in 2016.
“We don’t know who will conduct the probe, or who will determine the credibility of the probe and there’s no timeframe by when it will be completed,” Gupta told TNIE.
Echoing him, Shriram Subramanian, founder of InGovern Research Services, a proxy advisory firm, said: “The board should have conducted an independent probe earlier. Now, whether the board had the conviction or not when they backed the CEO is a question mark.”
Gupta had alleged Kochhar did not adhere to the code of conduct of the bank and regulatory provisions on conflict of interest.
Points of Contention
Kochhar provided loan to Videocon group on a quid pro quo basis
Kochhar was on the credit committee that approved the Rs 3,250 crore loan to Videocon
Videocon Group allegedly pumped the money into NuPower Renewables, owned by Kochhar’s husband Deepak
Kochhar’s brother-in-law Rajiv performed debt-restructuring work on corporate borrowers from ICICI Bank, including Videocon