The ICICI Bank has approached the Bombay high court seeking to bring the “termination of appointment” of Chanda Kochhar as its MD and CEO into effect, and also sought recovery of various amounts from her. In a monetary suit, the bank sought dismissal of Kochhar’s petition and stated that the issue can be decided in a commercial suit. “ICICI has filed a suit seeking recovery of amounts towards the clawback of bonuses given to the petitioner (Kochhar) from April 2006 to March 2018,” the bank said in its affidavit.
A clawback is a provision in which incentive-based pay, like a bonus, is taken back from an employee by an employer following misconduct or declining profits. The affidavit was submitted in response to a petition filed by Kochhar challenging her sacking, months after she voluntarily left the country’s second-largest private sector lender.
“On December 8, 2016, Kochhar executed a clawback agreement with the bank pursuant to which ICICI is entitled to a return of the previously paid variable pay or deferred variable pay from the petitioner in the event of a determination of a gross negligence or an integrity breach by Kochhar.
“The petitioner’s conduct has caused substantial embarrassment to the bank and stakeholders, and has led to irreparable reputational loss to the bank,” it stated. “The petitioner (Kochhar) deliberately committed violation with a mala fide intent to obtain illegal benefits,” it stated. The affidavit further said that Kochhar’s petition challenging her sacking by the bank claiming violation of RBI rules is a “mala fide attempt” to secure valuable stock options of the bank.
Kochhar’s advocate Sujoy Kantawalla argued that Kochhar’s termination from her post came months after the bank approved her voluntary resignation on October 5, 2018 and therefore the bank’s action is “illegal, untenable, and unsustainable in law.”
