The management and board of directors of the country’s second-largest bank, ICICI Bank, appeared cornered when shareholders raised serious concerns over the bank’s reputational and financial risks following the lender’s dismal corporate governance.
At the 24th Annual General Meeting of the bank held in Vadodara on Wednesday, shareholders expressed disappointment over the performance of the directors and that of its Managing Director and CEO, Chanda Kochhar.
When shareholders were asked to share their views on the bank’s performance, one of them, Sunil Hemnani, raised serious objection to the ‘disappointing’ corporate governance of the senior management despite being ‘rewarded’ with ‘American-like’ perks.
“The bank’s overall growth for the past five years has been 6.5 per cent, which is the slowest by private banks’ standards. The salaries are comparable to American perks, yet without American corporate governance standards. There is a need for serious introspection. We don’t find accountability,” he said.
However, at the onset of the AGM, Non-Executive Chairman Girish Chandra Chaturvedi had requested the members to restrict their discussions to topics pertaining to the AGM notice, and also clarified that since the MD and CEO Chanda Kochhar is currently under investigation, it would be premature for the bank to comment on it.
Yet, there were demands for Kochhar’s presence, as some of the shareholders shouted slogans alleging corruption in the bank.
The shareholders from Mumbai and other cities also expressed disappointment over the move to reappoint Kochhar as a director on the board of ICICI Securities.
Addressing the gathering of shareholders, newly-appointed Chief Operating Officer (COO) Sandeep Bakhshi admitted to corporate governance issues, and said that it was with this objective that the board had decided to appoint Justice Srikrishna for the investigation.
“We should wait for the outcome. I can assure the shareholders that we have ring-fenced the bank functioning from this event, and as a bank, we are putting our best foot forward and maximise the opportunity and serve the society with the highest standards of governance. We assure you that every step taken by us would be to put our bank in a logical position in the ecosystem,” said Bakhshi.
He further highlighted the silver-lining in the economy, which, according to him, is showing signs of revival. “Across sectors, services, agri, industry and corporate, they are making a comeback. We have had a challenge with NPAs in the ecosystem, but I am happy to tell our shareholders that we are at the tail end,” he added.