LUTHRA & LUTHRA, CONTROL RISKS JOIN ICICI BANK PROBE

Luthra& Luthra, Control Risks to help ex-judge probe allegations against Chand a Kochhar

Luthra & Luthra, a law firm, and Control Risks, a global specialist in risk assessment, are set to assist

former Supreme Court judge BN Srikrishna to probe the allegations against ICICI Bank's Managing Director and Chief Executive Officer Chanda Kochhar. While Luthra & Luthra will focus on conducting a forensic audit of the transactions between ICICI Bank and Videocon Industries, Control Risks' mandate is to help Srikrishna on regulatory violations overseas, if any. Based in the US, Control Risks has a team of global specialists. DEV CHATTERJEE writes

Law firm Luthra & Luthra and global risk assessment specialist Control Risks are set to assist former Supreme Court judge BN Srikrishna in his probe into the allegations against ICICI Bank MD and CEO Chanda Kochhar.

While Luthra & Luthra will focus on conducting a forensic audit of the transactions between ICICI Bank, Videocon Industries and other clients of the bank, Control Risks’ mandate is to help Srikrishna on regulatory violations overseas, if any.

Based in the US, Control Risks has a team of global specialists, which includes crisis management and security consultants, investigators, forensic accountants, cyber incident responders, technology experts and even former soldiers. As the American Depository Receipts (ADRs) of ICICI Bank are listed on the New York Stock Exchange, it runs the risk of regulatory action, including shareholders class action suits in the US, if the allegations against Kochhar are proved, said a lawyer. The final decision to appoint the consultants will be taken by Srikrishna.

Emails sent to Luthra & Luthra, Control Risks and ICICI Bank did not elicit any response. According to an insider, the investigation will take at least four to six months to complete as many transactions took place in tax havens abroad. If the probe gets extended, it will be closer to the end of Kochhar’s term in March next year.

The ICICI Bank board instituted the independent enquiry on May 30 after various government agencies as well as the Securities and Exchange Board of India (Sebi), the market regulator, sent notices to the bank, seeking its view on the allegations.

In March, the bank’s board, led by Chairman MK Sharma, had given a clean chit to Kochhar without an independent probe, drawing criticism from various stakeholders for dragging its feet on a probe into the allegations.

Some foreign investors have cut their shareholding in the bank after the corporate governance issued surfaced. According to a note by global financial services firm Macquarie, the bank should have hired an outsider to change the DNA of the organisation as

it can be changed only by an outsider.

The composition of the board is also expected to change with more independentdirectors set to be appointed in the coming months, led by a new chairman, who will replace Sharma whose term comes to end in June. The charges against Kochhar were made by a shareholder, Arvind Gupta, who wrote a letter to the Prime Minister’s Office in

2016, stating that NuPower Renewables, a firm owned by Chanda’s husband Deepak Kochhar, received ~640 million investment from Videocon Industries. The loan to NuPower was granted after ICICI Bank gave a ~32 billion loan to Videocon Industries.

This loan has now turned bad. NuPower, Videocon and the Essar group have denied any wrongdoing.