3 FIIS trim holdings in ICICI Bank amid governance woes

BENGALURU: The troubles for the ICICI Bank Ltd board go beyond appointing a successor to the incumbent chief executive officer Chanda Kochhar, with India’s second largest private bank struggling to retain the faith of foreign institutional shareholders.

At least three foreign institutional shareholders, including Baillie Gifford and Co, Abu Dhabi Investment Council, Noosa, and Commonwealth Bank of Australia, have cut their holdings in ICICI Bank, according to the filings with the stock exchange, and two executives familiar with the development.

On April 9, Baillie Gifford sold 29,407,246 shares of ICICI at ₹280 apiece, while Abu Dhabi Investment Council, Noosa, sold 17,70,000 ICICI shares, at ₹289 per share on June 4, according to the filings with the stock exchanges. In May, Commonwealth Bank of Australia had sold its entire stake in ICICI Bank, said one of the executives mentioned above, requesting anonymity.

“Foreign investors are not happy with this uncertainty over allegations of corporate governance and questions raised on the CEO. The board has not helped in addressing these problems and, for this reason, FIIS are selling shares,” the executive added.

Mint could not independently ascertain the remaining share holdings of Baillie Gifford and Abu Dhabi Investment Council, Noosa.

Email queries to Baillie Gifford and Abu Dhabi Investment Council, Noosa, seeking comments did not elicit any response. A spokesperson for Commonwealth Bank of Australia declined to comment.

“We are not able to confirm any CBA (Commonwealth Bank of Australia) shareholding in ICICI Bank. CBA’S broader business includes a number of businesses in wealth management, superannuation and funds management. As such, it is possible the aggregate view of CBA’S shareholdings includes shareholdings of investment managers, who act and invest on behalf of their clients. We are unable to comment on their behalf,” said a Commonwealth Bank of Australia spokesperson.

Although all three investors held less than 1% stake in ICICI, the fact that FIIS are selling shares explains the underperformance of the company’s shares since the controversy around Kochhar first surfaced in the last week of March. Between March 28 and June 18, ICICI Bank’s shares rose 5.06%, compared to the Sensex and BSE Bankex returning 7.82% and 8.81%, respectively.

In the past three months, the ICICI Board has added two independent directors and a new government nominee, but is yet to name a new chairman.