Ex-bureaucrat likely to be ICICI Bank chairman
Board shortlists former IAS officials from FinMin, to meet today
Private sector lender ICICI Bank’s board will meet on Friday to discuss the appointment of a new chairman from a shortlist of four former bureaucrats who have worked with the finance ministry. The term of M K Sharma, the current chairman of ICICI Bank, ends on June 30.
The bank will then send the selected candidate’s name to the Reserve Bank of India (RBI) for clearance.
The appointment of the new chairman comes at a time when ICICI Bank is battling one of its worst management crises. “The board is of the view that the bank needs a seasoned bureaucrat from the Indian Administrative Service (IAS) who is methodological, has a good grasp over economy-related issues, and had served in a senior position in the Ministry of Finance,” said a person privy to the development.
Sources said that the ICICI board had considered some former finance ministry officials, including Shaktikanta Das, former revenue secretary and current member of 15th Finance Commission and India’s Sherpa at G20; D K Mittal, former financial services secretary; and Tapan Ray, former corporate affairs secretary and interim economic affairs secretary. Former Securities and Exchange Board of India (Sebi) chairman C B Bhave, who has worked in the finance ministry earlier, too, was one of the names the board discussed. However, it could not be ascertained whether these bureaucrats had evinced an interest in joining the bank’s board as chairman.
“It is prudent to select a candidate who could lead the board in the current situation as the bank is facing a reputational risk on account of various charges against ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar. The decision should be able to convince shareholders to keep the faith in the system,” said another person.
An email sent to ICICI bank spokesperson didn’t elicit any response.
On June 18, Chanda Kochhar went on indefinite leave pending a probe against her. The bank appointed Sandeep Bakhshi as chief operating officer (COO).
At present, the bank board comprises 13 members, including seven independent directors. Since January, three independent directors - Homi Khusrokhan, Tushaar Shah, and V Sridar — have retired and were replaced by Uday Chitale, Radhakrishnan Nair, and M D Mallya. In April, the government had replaced its nominee Amit Agarwal with Lok Ranjan without any explanation.
In the wake of probes by government agencies and the market regulator, the board had appointed former Supreme Court judge B N Srikrishna to conduct an independent enquiry to investigate the allegations of impropriety against Kochhar.
Sources said that Srikrishna recommended law firm Luthra & Luthra assist him in his probe. Luthra & Luthra is also the firm which conducted the probe at Fortis Healthcare.
Meanwhile, the bank is also preparing a reply to the show cause notice served by Sebi. Earlier this month, ICICI Bank and Chanda Kochhar had sought more time to respond to the notice and had requested the regulator to share documents on the basis of which the notice was served. The market regulator is said to have shared the documents early this week.
Sebi issued a 12-page show cause notice to ICICI Bank and Chanda Kochhar on May 23. The regulator in its notice raised questions over the code of conduct because Chanda Kochhar allegedly had not disclosed the conflict of interest arising out the of business dealings between ICICI Bank, Videocon, and NuPower Renewables, promoted by her husband Deepak. All listed companies and their key managerial staff are required to follow a code of conduct and comply with all securities norms.
On April 17, the regulator had initiated a preliminary enquiry into whether the bank’s board was aware of the conflict of interest and the stance of the independent directors when the board had approved the loan. Besides, the regulator sought an explanation on lapses in disclosures of business dealings involving Deepak Kochhar. In March, ICICI Bank’s board had given a clean chit to Kochhar without conducting a formal probe into allegations by a whistle-blower.