Annual General Meeting: ICICI Securities vote may favour Chanda Kochhar

By: | Published: August 31, 2018 5:15 AM

ICICI Securities on Thursday said the results of the voting on the reappointment of ICICI Bank MD and CEO Chanda Kochhar as a director on the board would be announced within 48 hours even as media reports said the biggest shareholder ICICI Bank had voted in favour of Kochhar being reappointed.

The annual general meeting of ICICI Securities was held on Thursday and the meeting was chaired by Vinod Kumar Dhall, an independent director, in the absence of chairperson Chanda Kochhar. (File photo: Reuters)

ICICI Securities on Thursday said the results of the voting on the reappointment of ICICI Bank MD and CEO Chanda Kochhar as a director on the board would be announced within 48 hours even as media reports said the biggest shareholder ICICI Bank had voted in favour of Kochhar being reappointed.

The annual general meeting of ICICI Securities was held on Thursday and the meeting was chaired by Vinod Kumar Dhall, an independent director, in the absence of chairperson Chanda Kochhar. Proxy advisory firm IiAS had advised investors to vote against Kochhar’s reappointment. “We believe she should be reappointed on the board only after all the charges against her have been cleared,” the firm wrote in a note.

The firm pointed out that ICICI Bank had, in a recent US Securities and Exchange filing, highlighted the possibility of increased regulatory scrutiny and reputational risks from independent enquiries into loans given by ICICI Bank under Kochhar’s watch.

These investigations, IiAS noted, could materially and adversely impact operations and financial performance. “In such a scenario, her presence on the board of ICICI Securities, while legally compliant, exposes the company to the same risks and the possibility of legal and regulatory sanctions,” it said.

Around 45 equity schemes — across 14 fund houses — hold stakes in ICICI Securities and their holding was valued at Rs 1,157 crore at the end of July, data from Value Research show. As of July 2018, ICICI Prudential Mutual Fund had an exposure of around Rs 397 crore. Other funds include IDFC MF, L&T MF, Aditya Birla Sun Life MF, UTI MF and DSP MF, among others.

One senior fund manager observed there was no reason to vote against Kochhar’s reappointment because ICICI Securities was being professionally managed.

Many of the mutual funds that hold shares in ICICI Securities may abstain or not vote against Kochhar’s reappointment because ICICI Bank is a distributor for their schemes, independent analysts pointed out.

Shares of ICICI Securities, which listed on the exchanges on April 4, ended at Rs 327.20 apiece, down 1.27% on the BSE on Thursday. It has lost 36% since the listing.

There are eight members on the board of ICICI Securities, with Kochhar being the chairperson. There are four independent directors, while other board members include Shilpa Kumar, MD and CEO, Ajay Saraf, ED, and Vishakha Mulye, the ICICI Bank nominee on the board.

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