A 10 member ICICI board is likely to re-assemble for a second assessment this week. The meeting would is to brainstorm whether to ask Chanda Kochhar, the CEO at ICICI bank to step down or to let her continue in her role.
A whistleblower alleged a nexus of transactions between Chanda Kochhar, her husband- Deepak and brother in-law Rajeev with that of Venugopal Dhoot's Videocon Industries. Apparently, the whistleblower claimed that the Kochhar's may have received kickbacks in return for a Rs 3250 crore loan.
The ICICI board convened a board meeting two weeks ago involving a twelve member board headed by Chairman MK Sharma. The meeting concluded that there was no question of quid pro quo, nepotism or conflict of interest on the part of Chanda Kochhar. This board meeting was criticized for failing to ask the right questions. In fact, Sify.com in a conversation with the whistleblower understood that the board spoke of its own internal credit policies, whereas it should have inquired the role of Kochhars. "Who asked the board to certify internal review?" questioned the whistleblower in a conversation.Read the whistleblower's complaint here.
The board meeting was hence followed by calls for an independent investigation by law agencies. A CBI inquiry that was constituted recently has turned the spotlight back on Chanda Kochhar, with few suggesting Kochhar to step down.
Developments from the CBI investigation so-far:
- The CBI has launched a preliminary enquiry in the case.
- IT department issues notices to NuPower, company founded by Deepak Kochhar, Chanda's husband.
- Calls for RBI to initiate an independent probe
- CBI interrogates Rajeev Kochhar, Chanda's brother in law
- A lookout circular against the Kochhars and Venugopal Dhoot of Videocon Industries prevents them from overseas travel
Bloomberg reported people within the bank saying that it was in the best interests that Kochhar step down while investigations went on. The report claims that people refrained from revealing their identities.
While Kochhar has had the backing from the board-room, the allegation of a Videocon nexus seems to eat into her reputation as an astute leader.
Kochhar who's served close to three decades at the bank rose from a management trainee to the CFO and then the Joint Managing Director between 2007-09. After KV Kamath, former CEO, stepped down she was instrumental in shaping the bank as one of the best retail banks of India. The bank won multiple accolades under her leadership, and Kochhar was found featuring on the 100 most powerful women list compiled by Forbes in 2009.
While the bank itself has continued on a bright pedestal, analysts concur that its bad loans have risen by leaps and bounds. In fact, ICICI bank has the largest bad loans among its peers from the private sector. ICICI's bad loans in the September 2017 quarter alone escalated to Rs 4503 crores. This amount involves the provisions for loan losses. The rise in bad loans reportedly slashed 34% off its profits.
The Reserve Bank of India in an assessment labelled ICICI as one among the three banks "too big to fail", but the rising bad loans forces one to think in a different way.
Amid the CBI investigation, calls for Chanda Kochhar to step down as the head of India's largest private sector bank is gaining weight. Chanda, who's managed to remain India's finest bankers and a role-model be able to manage herself as the CEO?
Here are a few twitter responses suggesting her to step down:
Whether Chanda Kochhar & family flouted any laws is for the Govt is to decide.— Rahul Khanwalkar (@RahulKhanwalkar) April 4, 2018
But 1st & foremost, this matter is between CEO & ICICI shareholders. She definitely breached her duties towards them and must resign.
#ChandaKochhar must resign and must go !!!— Sameer (@QmSameer) April 9, 2018
@chandakochhar Ma’am, you should resign from the post of MD. A big shame on your part !! Never expected such acts on your part!!! Have a little bit of decency!— Vivek Avasthi (@iamvivekanjali) April 6, 2018