Even as the CBI quizzes ICICI Bank chief executive Chanda Kochhar’s brother-in law Rajiv Kochhar in connection with the bank’s loan to Videocon, global firm Morgan Stanley says that the bank’s shares are under pressure driven by CEO’s new concerns.
Even as the CBI quizzes ICICI Bank chief executive Chanda Kochhar’s brother-in law Rajiv Kochhar in connection with the bank’s loan to Videocon, global firm Morgan Stanley says that the bank’s shares are under pressure driven by CEO’s new concerns. According to Morgan Stanley, newsflow will drive volatility in the stock.
ICICI Bank shares were trading at Rs 279 on NSE this morning. The shares have shed more than 5% in the last one month. The private lender assumed increased focus after reports of alleged impropriety and a potential quid pro quo in disbursing loan to Videocon group.
However, in a press conference last week, ICICI Bank Chairman M K Sharma mostly reiterated the ICICI Bank’s statement, wherein the board had backed MD and CEO Chanda Kochhar, seeking to quell the report that the loan was given improperly.
The firm says that PPoP progression should see improvement over 2-3 quarters. According to the firm, the key for long-term investors will be the improvement is asset quality. Notably, Rajiv Kochhar is the CEO of Singapore-based Avista Advisory Group. The firm advises companies on mergers and acquisitions restructuring as well as fund raising among other services.
The matter assumed heightened scrutiny after allegations that the company may have benefited from Kochhar’s relationship with the ICICI Bank CEO and got the mandate to restructure foreign currency-denominated debt deals of seven companies, which included Videocon.
This came within days of a report in The Indian Express, saying that Videocon chairman Venugopal Dhoot started a joint company with ICICI Bank MD and CEO Chanda Kochhar’s husband Deepak Kochhar along with two of her other relatives. The report claimed that a staggering Rs 2,810 crore out of the Rs 3,250 crore loan given out to Videocon has remained unpaid. Videocon account was declared a non performing asset (NPA) in 2017. Further, the report says that this Dhoot-Kochhar-ICICI web of transactions is under scanner of investigative agencies.