Govt nominee to stay away from ICICI board meet

Ministry to wait for feedback from RBI, probe agencies in Videocon loan deal

The government nominee on the board of ICICI Bank might continue to skip meetings till it receives feedback from investigative agencies and the Reserve Bank of

India (RBI) on the allegations of conflict of interest against its

Chief Executive Officer and Managing Director, Chanda Kochhar, related to loans worth ~32.5 billion extended to the Videocon group of companies.

The government is of the view that it is a minority stakeholder on the board of ICICI Bank and can be overruled by the private bank's board as investigating agencies are yet to establish conflict of interest in the case. The government holds 10.8 million shares in ICICI Bank, which translates into a 0.22 per cent stake.

“There are three ways of dealing with the issue. One is through the corporate governance route, the second is through the RBI and the third is through an investigation, which is being taken care of by the agencies," a senior official said, explaining the "government's dilemma."

“If we remain silent in the meeting, we will be seen as validating the board’s view on the matter. If we present our view, then the board can overrule as the investigations are ongoing,” the official said.

The government official said it would present its view before the board on the loan issue, after receiving feedback from investigative agencies. “The regulator, which can inspect the books of all private sector banks, including ICICI Bank, is aware of the case. It has been silent so far. So we are awaiting some feedback from the RBI,” the official added.

The government has, however, not written to the RBI in the case, a finance ministry official said.

"Why should we interfere in the RBI's role? The regulator has the powers to take appropriate action in the case of any deviation from the rules," the official added. The Central Bureau of Investigation is probing allegations of nexus between the ICICI Bank chief's spouse, Deepak Kochhar, and Videocon Industries.

Videocon Industries received a loan worth ~32.5 billion from the bank in 2012. The Enforcement Directorate has also initiated an inquiry in the case.

Lok Ranjan, joint secretary in the department of financial services (DFS), is the government nominee on the ICICI Bank board. Ranjan did not attend the board meeting held on Monday that approved the audited annual accounts of the bank for 2017-18. Ranjan was also not present in Tuesday's board meeting.

The Tuesday meeting discussed the bank's strategy, budget and planning for 2018-19. This is the third such meeting that the government nominee on ICICI Bank's board did not attend since the controversy came to light. The previous nominee of the government, DFS joint secretary Amit Agarwal, had also skipped a meeting held on March 28 that had reposed "full faith and confidence" in ICICI Bank's Managing Director and Chief Executive Officer Chanda Kocchar in light of the allegations. "The board has clarified its stand on the matter in the March 28 meeting, and we have nothing to add to it," Kochhar had said at a press meet, following the earnings announcement, on Monday. She said the Videocon loan issue was not discussed in the meeting. The CBI has registered a preliminary inquiry to ascertain the allegation that Videocon group Chairman Venugopal Dhoot gave money to a firm promoted by Deepak Kochhar and his two relatives, six months after the Videocon group received a loan from ICICI Bank in 2012. The

~32.5-billion loan was part of the ~s 400-billion one that the Videocon group received from a consortium of 20 banks, led by the State Bank of India.