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Chanda Kochhar on annual leave, not forced one: ICICI Bank

The probe into the conduct of Chanda Kochhar in connection with loans given to the Videocon Group is likely to start in the next one to two weeks

ICICI Bank, Chanda Kochhar, Videocon Group, Deepak Kochhar, NuPower Renewables
The lender’s board in a statement said she is currently on her annual leave that had been planned in advance.

ICICI Bank on Friday denied reports that managing director and chief executive officer Chanda Kochhar has been asked to go on leave during an inquiry to be initiated related to loans disbursed to the Videocon Group. The lender’s board in a statement said she is currently on her annual leave that had been planned in advance. It also said the bank’s board, headed by chairman M K Sharma, denied it has appointed any search committee to find her successor. The probe into the conduct of Chanda Kochhar with regards to loans given to the Videocon Group is likely to start shortly in the next one to two weeks, and will continue for about two to three months, sources said. Kochhar is expected to be back in office by mid-June. The process for selecting the agency that will conduct the enquiry is on, sources added.

In a surprise move earlier this week, the board altered its stance on the matter and said it would initiate an independent enquiry into the matter. It had not mentioned whether Kochhar would have to be on leave during the period of enquiry. The decision to initiate the enquiry was taken after the board again recently received complaints against Kochhar from a whistleblower.

The complaints against Kochhar were first raised in 2016 by an investor Arvind Gupta. He alleged that Kochhar may have violated the bank’s code of conduct and provisions relating to conflict of interest while giving loans to the Venugopal Dhoot-led Videocon Group. The likely cause of the conflict is the series of financial transactions between the Videocon Group and Deepak Kochhar, husband of Chanda Kochhar.

In 2008, Dhoot had set up a company with Deepak Kochhar called NuPower Renewables. In 2010, he is understood to have given a loan of Rs 64 crore to this company before transferring its ownership to a trust headed by Deepak Kochhar for just Rs 9 lakh. The transfer of the ownership of NuPower is understood to have happened around six months after the Videocon Group received Rs 3,250 crore as a loan from ICICI Bank.

This loan was part of a consortium loan in which 20 banks had participated and ICICI Bank’s share is less than 10% of the total amount. ICICI Bank has clarified that the terms and conditions offered for these loans were similar to those offered by the other banks, ruling out the possibility of any special benefit by ICICI Bank to the borrower.

In March, the board had reposed faith in Kochhar saying it had found ICICI Bank’s internal processes that approved loans robust. In a strong endorsement of its CEO, the board ruled out scope for any favouritism, nepotism or a quid-pro-quo.
M K Sharma had also said that Chanda Kochhar had made all necessary disclosures while sitting on the credit committee that sanctioned loans to the Videocon Group in 2012. Sharma observed the board did not see her being on the credit committee as a conflict of interest in any manner since Videocon Group was no longer an investor in NuPower Renewables.

On Wednesday, the bank said the scope of enquiry would include all relevant matters arising out of examination of facts and wherever warranted, use of forensics, email reviews and recordal of statements of relevant people. Chanda Kochhar began her career with the erstwhile ICICI in 1984, and took over as the MD & CEO of ICICI Bank in 2009. During her tenure, the bank’s net profit has increased around 80% to Rs 6,777.42 crore, while the gross non-performing assets have increased to 8.84% of total loans from 4.32%.

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First published on: 02-06-2018 at 03:56 IST
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