ICICI Bank board reposes faith in Chanda Kochhar, refutes allegations on Videocon exposure
According to ICICI Bank, in 2012 a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon group (Videocon Industries Ltd and 12 of its subsidiaries/ 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. The private lender`s current exposure to the Videocon group was a part of this syndicated consortium arrangement
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Looking to invest in stocks? These 4 banking shares must be on your purchase list for 2019Amid controversy on ICICI Bank`s exposure to Videocon group, the private lender on Wednesday said its board reposed full "confidence" and "faith" on its MD and CEO Chanda Kochhar and after reviewing the bank`s internal credit approval processes, concluded that there is no question of any favouritism, nepotism or quid-pro-quo. "...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," it said in a statement.
According to the lender, in 2012, a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon group (Videocon Industries Ltd and 12 of its subsidiaries/ 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. The private lender`s current exposure to the Videocon group was a part of this syndicated consortium arrangement.
"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," it said. The bank also said its credit approval authorisation framework is laid down by the Board of Directors and the the larger exposures are approved by the board`s Credit Committee.
The majority of Credit Committee members are independent directors of the Bank and the Chairman of the Credit Committee, till as late as June 2015, was always a non-Executive Director. "Based on the above, it can be concluded that there are adequate checks and balances in loan appraisal, rating and approval processes within the Bank, both from the control as well as from a governance perspective," it added.
The bank further said after the preparation of the Information Memorandum and the initial due diligence for the financing programme by the lead arrangers and after the sanction of the facilities by the lead bank, the Credit Committee of ICICI Bank in 2012 sanctioned its share of facilities in the syndicated arrangement to the Videocon group.
"This Committee was chaired by the then Chairman of ICICI Bank and it included independent and working Directors of the Bank. It is important to note that Chanda Kochhar was not the Chairperson of this Committee," it said.
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 said that "similar rumours had first surfaced in the mid-2016 and had been appropriately responded to".
"Nevertheless these have resurfaced in the recent past to malign the bank," it added.
