ICICI Bank board is currently divided over whether to ask Chief Executive Officer Chanda Kochhar to step down as government agencies investigate allegations of impropriety over loans made to Videocon group. At least some outside directors are opposed to Kochhar continuing in her role, said sources. The board of India's second-largest private sector bank may meet soon to consider its next course of action. Kochhar's current tenure is set to end on March 31, 2019.
ICICI's board, which consists of 12 members, reviewed credit approval processes and found them to be robust. Headed by Chairman MK Sharma, the board said there was “no question” of any quid pro quo, nepotism or conflict of interest and expressed “full faith and confidence” in Kochhar, a March 28 filing said. The board includes six independent directors, including the bank chairman and head of state-owned Life Insurance Corporation of India, which owns 9.4 per cent stake. The board also includes a government nominee and five executive directors from ICICI. The Central Bureau of Investigation (CBI) recently began a preliminary inquiry into an alleged nexus between Videocon Chairman Venugopal Dhoot and Kochhar's husband. A preliminary inquiry is the first step to assess allegations of wrongdoing.
Gaurang Shah, head investment strategist at Geojit Financial Services Ltd. Said, “If the CEO has to step down, the shares might see a knee-jerk fall and then recover from there on. Allegations are regarding transactions which have happened in the past and the market has already priced in most of the risks that could come from it.”
Kochhar’s brother-in-law detained
The CBI stopped Chanda Kochhar’s brotherin-law Rajiv Kochhar at Mumbai airport as the agency wanted to question him in connection with its preliminary enquiry (PE) against his brother Deepak Kochhar and Videocon chairman Venugopal Dhoot.
Kochhar was intercepted before his departure for a Southeast Asian destination and brought to the agency’s office and examined. Although he was later allowed to leave, sources said he was asked to report for another round of examination. Investigators have also kept his mobile phone and passport.