Videocon loan controversy: ICICI Bank's board could meet this week to decide Chanda Kochhar's fate

The ICICI Bank board could meet this week to weigh-up developments in the Videocon loan controversy, which has forced some outside directors to question MD and CEO Chanda Kochhar’s role with the bank, according to media reports.

Chanda Kochhar is facing questions of conflict of interest in the controversy. The Central Bureau of Investigation (CBI) has registered a so-called preliminary enquiry naming Videocon Group promoter Venugopal Dhoot, Kochhar’s husband Deepak Kochhar and others, to determine alleged wrongdoing in the sanctioning of a Rs 3,250 crore ICICI loan to the Videocon Group.

A preliminary investigation is the first stepto gather information about allegations. If the agency is convinced there exists prima facie material in the matter, it may register a regular case against the accused.

“Since the board’s first declaration about 10 days ago that it has faith in Chanda Kochhar, a lot has happened. There is some discussion about lookout circulars issued against some in the Kochhar family, there is a new member on the board, too – all these developments have to be discussed,” a person familiar with the development was quoted as saying by The Economic Times .

But a  Bloomberg report said the bank’s board is divided over whether to ask Chanda Kochhar to step down. The ICICI board consists of 12 members and at least some outside directors are opposed to Kochhar continuing in her role, the news agency reported.  Kochhar’s current tenure as CEO ends on 31 March, 2019.

On Sunday, the CBI questioned Chanda Kochhar’s brother-in-law Rajiv Kochhar and two directors of NuPower Renewables Pvt. Ltd. in connection with the loan given to the Videocon Group, in 2012.

Government sources, speaking to the  Times of India , termed the lender’s decision to repose full confidence in its CEO as hasty.

On Saturday, the government changed its nominee on the bank’s board. According to a BSE filing, the government nominated Joint Secretary Lok Ranjan of the Department of Financial Services, as its nominee director with effect from 5 April, 2018. Ranjan replaced Amit Agrawal.

Sources said that the development was “routine” as Agrawal’s portfolio had changed. The development, however, assumes significance amid the Videocon loan controversy.

On Friday, authorities reportedly issued a lookout notice  to all airports against  Kochhar, her husband Deepak and Dhoot. The look out circular (LOC) was sent at the behest of the CBI. The decision reportedly aims to prevent the three from flying out of the country without informing authorities.

The ICICI Bank board  met on 2 April and on 28 March.  On 2 April , the bank board met to review cases under the Insolvency and Bankruptcy Code which are before the National Company Law Tribunal (NCLT) along with other routine matters.

The board on 28 March came out in support of Chanda Kochhar, saying it had full faith and confidence in her and described certain reports against her, regarding the credit disbursement to the Videocon group as “malicious and unfounded rumours”.

With inputs from agencies