Justice B N Srikrishna Panel finds Chanda Kochhar guilty after a probe.
ICICI Bank’s former CEO and managing director Chanda Kochhar has been sacked by ICICI following an inquiry that found her guilty of “conflict of interest” in sanctioning a loan for Videocon which had close business ties with her husband. She has been asked to return all bonuses paid between April 2009 and March 2018.
While the focus has been often on PSU banks, questions are now being raised whether there is a bigger rot in India’s private banking system?
An internal probe conducted by the ICICI Bank Chanda Kochhar for violating the bank’s code of conduct. The probe, which was in connection to the ICICI-Videocon loan case, found that Chanda Kochhar failed to deal with conflict of interest by not making voluntary disclosures that she should have.
Following the receipt of the probe report, the ICICI Bank also took a surprising step of retrospectively sacking Chanda Kochhar.
Hours later, Kochhar shot back saying she is hurt and shocked at the treatment.
Chanda Kochhar said, “I am utterly disappointed, hurt and shocked by the decision. I have not been given a copy of the report. I iterate that none of the credit decisions at the bank are unilateral. ICICI is an institution with established robust processes and systems that involve committee-based collective decision making with several professionals of high caliber participating in the decision making. Hence the organisation design and structure obviate the possibility of conflict of interest.”
Chanda Kochhar, talking about how the decision brought her “hurt” and “pain”, said, “I have served at ICICI for the last 34 years with all my dedication and hard work. I have never shied away from taking tough decisions whenever required to be taken in the best interest of the organisation. This decision from the bank has caused me immense hurt and pain.”
“I have pursued my career as an independent professional with utmost honesty, dignity and integrity. I continue to have faith and belief in my conduct as a professional and I am certain that truth will ultimately prevail,” she added.
Last year, following the allegations against her, Chanda Kochhar had voluntarily stepped down from her posts.
However, the ICICI Bank has now decided to treat that “separation” as “termination for cause” .
The probe was in relation to the ICICI-Videocon loan case. An activist-shareholder had alleged that the ICICI Bank lent Rs 3,250 crore to Venugopal Dhoot’s Videocon Group. Dhoot in turn allegedly invested Rs 64 crore in a company operated by Chanda Kochhar’s husband, Deepak Kochhar.
The allegation was essentially of a quid pro quo — that Chanda Kochhar got her bank to lend money to Videocon Group around the same time Venugopal Dhoot invested in Deepak Kochhar company.