ICICI’S Kochhar faces max ₹25 cr fine if found guilty

MUMBAI/BENGALURU: The Securities and Exchange Board of India (Sebi) has powers to impose a penalty but not demand the exit of ICICI Bank Ltd chief executive Chanda Kochhar if it finds she and the bank did not abide by fair disclosure norms in its ongoing probe.

A maximum penalty of ₹25 crore or three times the ill-gotten gains can be levied under Sebi rules, but in this case, the quantum of the penalty may be at the discretion of Sebi’s adjudicating officer, according to two executives familiar with the development.

“Only a financial penalty can be levied as under the current notice, there is no provision for asking the CEO to step down,” said the first of the two executives, both of whom spoke under condition of anonymity.

On May 24, Sebi sent a notice to ICICI Bank and Kochhar, seeking clarification with regard to disclosure of price-sensitive information from the bank and the CEO allegedly not abiding by the bank’s code of conduct.

“The show cause to Chanda Kochhar alleges that she did not adhere to the bank’s code of conduct as far as making disclosures...considering that CEO’S husband had a partnership with

a firm owned by the promoter of Videocon group, and some of the Group’s companies in turn secured loans from the bank, these disclosures should have been made as part of Sebi’s rules on LODR (Listing Obligations and Disclosure Requirements),” said the second executive.

ICICI Bank managing director and chief executive officer Kochhar can also ask for a settlement by paying a fine and without admitting to any wrongdoing, according to the second execu-

tive. on June 8 reported that ICICI Bank is looking to file a consent plea with Sebi.

Still, even a settlement with Sebi may not be enough for CEO Kochhar to complete her current five-year term, which ends in March 2019, as a reconstituted board, which has seen the entry of three new directors in the last two months, could still ask her to consider stepping down on moral grounds, according to a third executive aware of the matter.