Investors seek clarity on corporate governance, Kochhar probe

By: | Updated: September 13, 2018 5:14 AM

In response to these queries, Bakhshi said that it would not be appropriate for the bank board to take any decision before the investigation against Kochhar is concluded.

ICICI Bank, ICICI Bank AGM, annual general meeting, Vadodara, Chanda Kochhar, corporate governance, Girish Chandra Chaturvedi, money newsThe AGM left shareholders disgruntled as they sought clarity on both the contentious issues. (Reuters)

ICICI Bank held its 24th annual general meeting in Vadodara on Wednesday after it was postponed by nearly a month over corporate governance issues and allegations of regulatory lapses involving its managing director (MD) and chief executive officer (CEO) Chanda Kochhar, who is on an indefinite leave since June. The AGM left shareholders disgruntled as they sought clarity on both the contentious issues. The bank’s top officials who attended the AGM remained largely silent on Kochhar’s absence.

“Inquiries are going on and Kochhar is on leave,” chairman Girish Chandra Chaturvedi and COO Sandeep Bakhshi told shareholders. Most shareholders were vociferous in their demands for clarifications on the manner in which the bank’s board has given a clean chit to Kochhar thus far on the various allegations of conflicts of interest levelled against her. Kochhar is currently on leave after ICICI Bank decided to probe allegations of conflict of interest and quid pro quo against her while dealing with certain customers or borrowers of the bank, including Venugopal Dhoot-promoted Videocon Group. Sunil Hemnani, one of the shareholders present at the AGM said, “The fact that non-performing assets (NPAs) are mounting clearly shows misgovernance by the bank board. How did the board give a clean chit to Kochhar in just 15 minutes when CBI and ED inquiries are going on? The board should take investors into confidence as they are answerable to us.”

Shareholders also brought up the issue of breaching of listing guidelines by Kochhar. Markets regulator Sebi has also issued a show-cause notice to Kochhar and the bank on the alleged violation of disclosure norms in the Videocon case. Reacting to this charge, Bakhshi said: “There was a reference to a Sebi order against the bank. We want to clarify that the matter is pending at adjudication and the bank has not received any notice.” He also added that Kochhar has not been attending office and the bank will wait for Justice BN Srikrishna panel’s investigation report before taking any action. The shareholders also raised the appointment of Kochhar as chairman of the ICICI Securities and demanded to drop or postpone the move until the inquiries conclude.

The bank holds a 79.22% stake in ICICI Securities. In response to these queries, Bakhshi said that it would not be appropriate for the bank board to take any decision before the investigation against Kochhar is concluded. In 2012, ICICI Bank extended a loan of Rs 3,250 crore to Videocon Group. After the loan was granted, NuPower Renewables, which is run by Kochhar’s husband Deepak Kochhar, received Rs 64 crore from Videocon’s promoter through a series of investment vehicles, allegedly as a quid pro quo. In April 2018, the bank’s board stood firmly behind Chanda Kochhar, saying no wrong was committed by the MD and CEO. The stock of ICICI Bank ended at Rs 323.10 on BSE on Wednesday, down 1.07% from the previous close.

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