Chanda Kochhar was part of panel that cleared Videocon loan but no conflict of interest: ICICI chairman MK Sharma

Reiterating its stand on the Videocon issue, ICICI Bank Chairman M.K. Sharma on Thursday said reports alleging nepotism by the lender's MD and CEO Chanda Kochhar were unfounded and malicious in nature

IANS March 30, 2018 09:08:52 IST
Chanda Kochhar was part of panel that cleared Videocon loan but no conflict of interest: ICICI chairman MK Sharma

Mumbai: Reiterating its stand on the Videocon issue, ICICI Bank Chairman M K Sharma on Thursday said reports alleging nepotism by the lender's MD and CEO Chanda Kochhar were unfounded and malicious in nature. Saying that ICICI Bank's exposure to the Videocon Group (Videocon Industries and 12 of its subsidiaries or associates as co-obligors) for a debt consolidation programme and for the group's oil and gas capital expenditure programme aggregating approximately Rs 40,000 crore was less than 10 percent.

Sharma asserted that no individual bank employee has the ability to influence decisions of the credit committee. "Given this architecture of sanctioning all loans by the credit committee comprising of independent directors, no individual employee, howsoever.... (higher in) position has the ability to influence the decision on credit given by the bank," Sharma said at a press conference in Mumbai.

He clarified that none of "the investors of NuPower Renewables are borrowers of ICICI Bank" and that Kochhar did not chair the committee that had lent to Videocon.

"Kochhar was a part of the credit committee which sanctioned these loan facility to the Videocon Group. The Board does not see (this) as conflict of interest in any manner since Videocon Group is not an investor in NuPower Renewables. Hence, there was no need to recuse herself from this committee," Sharma said.

Chanda Kochhar was part of panel that cleared Videocon loan but no conflict of interest ICICI chairman MK Sharma

Videocon loan row: ICICI Bank stands by Chanda Kochhar, urges not to spread rumours. Reuters image.

"ICICI Bank was not the lead bank for this consortium and the bank only sanctioned its share of facilities aggregating approximately Rs 3,250 crore which was less than 10 per cent of the total consortium facility in April 2012." In addition, Sharma informed at the press briefing that Kochhar has been making all her disclosures in accordance with the regulatory guidelines under the Companies Act and the Banking Act.

Sharma revealed that the bank has 'satisfactorily' replied to the questions of all the regulators, which he described as an ongoing process between "a regulated entity like a bank and the regulators and other government departments".

In 2012, a consortium of 20 banks and financial institutions sanctioned credit facilities to the Videocon Group for a debt consolidation programme and for its oil and gas capital expenditure programme aggregating to approximately Rs 40,000 crore.

"ICICI bank's current exposure to the Videocon Group is part of this syndicated consortium arrangement. ICICI was not the lead bank for this consortium and the bank only sanctioned its share of the facilities aggregating to approximately Rs 3,250 crore, which was less than 10 per cent of total consortium facility in April 2012," Sharma said.

The bank in a statement on Wednesday had said that: "...the Board has come to the conclusion that there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours. The Board has full confidence and reposes full faith in the Bank's MD & CEO, Chanda Kochhar."

Noting that there have been "some malicious and unfounded rumours" in the past few days casting insinuations on ICICI Bank Ltd and its MD & CEO, the bank on Wednesday had said that "similar rumours had first surfaced in mid-2016 and had been appropriately responded to".

"Nevertheless these have resurfaced in the recent past to malign the bank," it added.

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