How Kochhar got clean chit in 15 min­utes, asks share­holder

Financial Chronicle - - FRONT PAGE -

FAC­ING mul­ti­ple en­quiries, ICICI Bank CEO Chanda Kochhar (in pic) has gone on long leave, but the al­le­ga­tions lev­elled re­gard­ing quid pro quo and con­flict of in­ter­est re­ver­ber­ated in the bank’s an­nual gen­eral meet­ing (AGM) on Wed­nes­day. Share­hold­ers sought clar­ity on the charges lev­elled against Kochhar and ques­tioned ICICI Bank’s de­ci­sion to vote in favour of reap­point­ing her on the board of ICICI Se­cu­ri­ties last month.

One of the share­hold­ers present at the AGM posed a tough ques­tion. “We de­serve a re­sponse. This is a big mess-up for the bank. How did you give a clean chit in 15 min­utes and now it is tak­ing so long for an in­ves­ti­ga­tion? On what ba­sis did you give sup­port to the CEO.”.

Kochhar, who is on leave since June till the com­ple­tion of an ex­ter­nal in­quiry into al­leged con­flict of in­ter­est, was not present at the AGM.

Some share­hold­ers, who spoke at the 24th AGM held at Vado­dara, also ques­tioned the cor­po­rate gover­nance prac­tices and stan­dards at the bank and whether the man­age­ment needs to take tough de­ci­sions. San­deep Bak­shi, the newly ap­pointed chief op­er­at­ing of­fi­cer, as­sured that the bank had been ringfenced from the con­tro­versy. Bak­shi said the bank has been tak­ing nec­es­sary steps and also pointed to good num­bers in the first quar­ter. “The bank is able to per­form and will come out of this,” he said, ex­press­ing his in­abil­ity to take any de­ci­sion on Kochhar pend­ing the Srikr­ishna panel re­port. “We are co­op­er­at­ing with all au­thor­i­ties…. We have in­su­lated the bank’s func­tion­ing from this in­ci­dent .... We are com­mit­ted to im­prov­ing the bank’s func­tion­ing within the pa­ram­e­ters of high­est cor­po­rate gover­nance,” said Bak­shi.

FC queries posed to se­nior ICICI Bank of­fi­cials did not elicit any re­sponse.

Share­hold­ers also ques­tioned the ab­sence of the gov­ern­ment nom­i­nee on the ICICI Bank board from board meet­ings of the bank. The gov­ern­ment nom­i­nee on the board Lok Ran­jan was ab­sent at the hour-long AGM chaired by newly-ap­pointed chair­man GC Chaturvedi. Nei­ther was MD Mallya, a re­cently ap­pointed board mem­ber, present. Many share­hold­ers also spoke against the core is­sue of sanc­tion­ing loans to the Venu­gopal Dhoot-run Video­con In­dus­tries, which is fac­ing bank­ruptcy pro­ceed­ings now. The bank’s share­hold­ers also sought stern ac­tion from the bank on any mis­do­ings on the part of Kochhar, while some also called for a re­struc­tur­ing of the top lead­er­ship given the al­le­ga­tions and ques­tioned the board for ini­tially back­ing Kochhar.

Share­hold­ers also ques­tioned the rea­sons for a jump in le­gal ex­penses and rued that this comes even as it has re­duced the div­i­dend pay­out. All the 14 or­di­nary res­o­lu­tions and four spe­cial res­o­lu­tions put up by the man­age­ment were passed at the AGM.

In March, on the eve of pub­lish­ing of a news re­port al­leg­ing im­pro­pri­eties and lack of dis­clo­sure against Kochhar, the board backed her in a pub­lic state­ment and said loans to Video­con was part of a con­sor­tium and ICICI Bank was not the lead banker. How­ever, more re­ports came out show­ing Kochhar’s hus­band Deepak and his brother, had al­legedly ben­e­fit­ted from ICICI Bank's bor­row­ers like Video­con and also the Ruias-pro­moted Es­sar group.

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