ICICI board members divided over Kochhar’s future at bank
NEWDELHI: Some members of ICICI Bank’s board have informally discussed the wisdom of persisting with managing director and CEO Chanda Kochhar, but a formal discussion involving the full board, leave alone a decision, is unlikely to happen before the end of April, when the board is scheduled to meet next, a person familiar with the matter said on condition of anonymity.
An ICICI Bank spokesperson said any talk of such a discussion is “baseless and incorrect”.
To be sure, emergency meetings of boards could be convened, and a second person familiar with the matter said, again on condition of anonymity, that one of ICICI Bank’s board could happen even next week.
Several investigative agencies are looking at improprieties and conflicts of interest in a loan extended by ICICI Bank to the Videocon Group.
Separately, Bloomberg News reported that the bank’s board “which less than two weeks ago expressed full faith” in Kochhar is now “divided”. The news agency added, citing unnamed sources, that some independent external directors are “opposed to Kochhar continuing in her role.” According to Bloomberg, Kochhar’s current term runs till March 31, 2019.
The second person cited above added the discussion regarding Kochhar’s future could be happening at the behest of the finance ministry, which is watching happenings in India’s largest private sector lender with concern.
The state-owned Life Insurance Corp has a just under 10% stake in the bank, and its chairman is on the board. On Friday, the government changed its nominee on the board, and appointed Lok Ranjan, joint secretary in the finance ministry. An ICICI Bank official who spoke on condition of anonymity said there is no connection between Ranjan’s appointment and the happenings at ICICI Bank. A finance ministry official familiar with the matter who asked not to be identified said his department is keeping an eye on proceedings at ICICI bank as is the banking regulator Reserve Bank of India.
One allegation against Kochhar is that ICICI Bank signed off on the loan to Videocon, even as Videocon chairman Venugopal Dhoot transferred his private investment in a company co-promoted with Deepak Kochhar, Chanda Kochhar’s husband, to the latter. Another is that Avista Corporate Finance, a company owned by Deepak Kochhar’s brother Rajiv Kochhar, advised Videocon on restructuring its debt, including that owed ICICI Bank – creating a potential conflict of interest issue. The Central Bureau of Investigation has named Deepak Kochhar and Dhoot in its preliminary enquiry, although it has not named Chanda Kochhar.
Last week, Rajiv Kochhar was prevented from boarding a flight from Mumbai to Singapore by immigration officials. He has since been questioned by CBI. The ICICI Bank official added that Chanda Kochhar has been attending office, that it is business as usual, and that she has told colleagues that she has no plans to resign because she believes she has done nothing wrong.