Money & Banking

‘Guilty’ Chanda Kochhar sacked by ICICI Bank

Our Bureau | | Updated on: Jan 30, 2019
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Bank to revoke future entitlements, past bonuses of ₹10 crore

There’s more trouble brewing for former ICICI Bank MD and CEO Chanda Kochhar. The BN Srikrishna enquiry committee, set up by the bank, has said she violated the lender’s code of conduct and framework on conflict of interest. The committee has also flagged the lack of disclosures on her part, which made the bank’s processes ineffective.

Following the findings of the committee, the board has decided to treat her resignation as a termination and revoked all her existing and future entitlements. Kochhar had taken an early retirement last October.

The board has also decided to claw back bonuses paid to her from April 2009 to March 2018. Per information in the annual reports from FY10 to FY18, Kochhar was paid a performance bonus of about ₹9.8 crore over this period.

“Primarily on account of ineffectively dealing with conflict of interest and due disclosure or recusal requirements, Chanda Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations,” said the report by the internal enquiry committee under former Supreme Court judge BN Srikrishna.

The committee was set up by ICICI Bank last June to look into allegations against Kochhar by an anonymous whistleblower.

Kochhar’s response

In a statement, Kochhar expressed shock and said the report has not been shared with her. “I reiterate that none of the credit decisions at the bank are unilateral. ICICI is an institution with established robust processes and systems which involve committee-based collective decision making with several professionals of high calibre participating in the decision making. Hence the organisation design and structure obviate the possibility of conflict of interest,” she said.

According to the probe report: “...the Bank’s processes were dependent solely on the directors discharging their fiduciary duty to recuse themselves and avoid conflict... the Bank’s processes were rendered ineffective by her approach to such disclosures and avoidance of conflict.”

The report, on Kochhar’s stint between April 1, 2009 and March 31, 2018, was taken up by the board on Wednesday. “The Bank notes there are no implications of the Enquiry Report on its published financial statements (Indian or US GAAP) for the relevant periods,” the bank said in a regulatory filing.

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The report and consequent decisions by the board come days after the CBI filed an FIR against Kochhar, her husband Deepak Kocchar and Venugopal Dhoot, MD, Videocon Group, for alleged quid pro quo and misconduct in loans sanctioned in 2012 to the Videocon Group.

The FIR had also said investigations may be initiated against former and current officials of ICICI Bank who were part of the sanctioning committees. They include Sandeep Bakhshi, Zarin Daruwala, K Ramkumar, Sonjoy Chatterjee, NS Kannan, Rajiv Sabharwal, KV Kamath and Homi Khusrokhan.

Published on January 30, 2019

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