ICICI Bank loan controversy: BN Srikrishna panel finds former CEO Chanda Kochhar violated lender's code of conduct
ICICI Bank has said that it will treat Kochhar's resignation as 'Termination for Cause' and will stop payment of unpaid benefits
The panel headed by the former Supreme Court Judge was probing allegations of quid pro quo against Kochhar
In October last year, facing enquiry over charges of nepotism and conflict of interest, Kochhar quit the bank
There are allegations of involvement of Kochhar and her family members in a loan provided to Videocon group on quid pro quo basis
Justice BN Srikrishna committee tasked to probe various allegations against Chanda Kochhar, the former Managing Director and Chief Executive officer of ICICI Bank, said the former banker had acted in violation of the bank's code of conduct.
The BN Srikrishna enquiry committee, headed by the former Supreme Court judge, was probing allegations of quid pro quo against Kochhar in sanctioning of a loan by ICICI Bank.
The Srikrishna panel report submitted to the Bank's board on Wednesday said, Kochhar was "in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations."
On its part, ICICI Bank has said that it will treat Kochhar's resignation as 'Termination for Cause' and will stop payment of unpaid benefits including unpaid bonus or increments, unvested and vested and unexercised stock options, and medical benefits.
The panel concluded that Kochhar's lack of diligence with respect to annual disclosures as required by the bank in terms of its internal policies implies that the lender’s processes were rendered ineffective by her approach to such disclosures and avoidance of conflict.
Last week, the Central Bureau of Investigation (CBI) registered a case against Chanda Kochhar, her husband Deepak Kochhar, MD of Videocon Group Venugopal Dhoot and others for allegedly cheating ICICI Bank to the tune of Rs 1,730 crore.
In October last year, facing enquiry over charges of nepotism and conflict of interest, Kochhar quit the bank.
There are allegations of involvement of Kochhar and her family members in a loan provided to Videocon Group on a quid pro quo basis.
It was alleged that Videocon Group pumped money into NuPower Renewables, a firm owned by Deepak Kochhar, husband of Chanda Kochhar.
There are also allegations that NuPower got investments of Rs 325 crore from Mauritius-based Firstland Holdings, a company owned by Nishant Kanodia, son-in-law of Essar Group co-founder Ravi Ruia.
The investments from Ruia's son-in-law's firm into NuPower started in December 2010. Incidentally, the same month ICICI Bank was the lead banker in a consortium of Indian banks that extended a $530 million loan to Essar Steel Minnesota LLC on 29 December, 2010. This loan was later classified as NPA.
The Reserve Bank in its 2016 investigation in the matter had raised questions over the ownership of the Mauritius-based entity, First Land Holding, which had invested Rs 325 crore in NuPower.
Kochhar, 56, with over three decades of banking service experience, was appointed as Executive Director of the bank from April 2001. She was designated as Deputy Managing Director effective 29 April, 2006 and Joint Managing Director and Chief Financial Officer effective 19 October, 2007.
Further, with effect from 1 May, 2009, Kochhar was appointed as Managing Director and CEO for a period of five years and got a reappointment for another five years from 1 April, 2014 to 31 March, 2019.
With inputs from PTI
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