Videocon loan case: ICICI Bank faces litmus test; 5 points
Last week, the board of ICICI Bank had ordered an independent probe, by an 'independent and credible' person, into allegations of 'conflict of interest' and 'quid pro quo' in Kochhar's dealing with certain borrowers. There are allegations that Chanda Kochhar had provided a loan to Videocon group on a quid pro quo basis.
Even as ICICI Bank is facing the heat in wake of the allegations made against its CEO and MD Chanda Kochhar for allegedly providing loans on quid pro quo basis to benefit family members, the private sector lender has started the process of appointment of non-executive chairman as the term of incumbent M K Sharma is coming to an end on June 30. Among various independent directors, former Bank of Baroda chairman and managing director M D Mallya is set to be frontrunner to succeed Sharma. He was recently appointed to the bank board as an independent director on May 29. Other independent directors on the board are Uday Chitale, Dileep Choksi, Neelam Dhawan, Radhakrishnan Nair, V K Sharma (LIC Chairman), and Lok Ranjan (government nominee director). Here are other recent developments related to India's largest private sector lender:
1. Last week, the board of ICICI Bank had ordered an independent probe, by an 'independent and credible' person, into allegations of 'conflict of interest' and 'quid pro quo' in Kochhar's dealing with certain borrowers. There are allegations that Chanda Kochhar had provided a loan to Videocon group on a quid pro quo basis.
2. The scope of enquiry would include all relevant matters arising out of and in course of examination of the facts and wherever warranted, use of forensics/email reviews and recordal of statements of relevant personal, the ICICI Bank statement had said.
3. The enquiry was initiated following the whistle-blower's allegations that Chanda Kochhar had not adhered to provisions relating to code of conduct of the bank and legal and regulatory provisions relating to conflict of interest over a period of time. The whistle-blower had also alleged quid pro quo in the course of Chanda Kochhar's work in dealing with certain customers/borrowers of the bank.
4. Last month, market regulator Sebi had served a notice on ICICI Bank's CEO and MD Chanda Kochhar on dealings of the bank with Videocon Group and Nupower. In April, the bank's board had expressed full confidence in Chanda Kochhar, ruling out any quid pro quo as alleged with regard to certain loan given to Videocon group.
Watch this Zee Business video
5. Chanda Kochhar’s leadership came under a cloud following the resurfacing of allegations against her, including alleged conflict of interest over loans made to Videocon Group, whose chairman Venugopal Dhoot had business links with her husband Deepak Kochhar. The allegations first surfaced in 2016, but the ICICI Bank’s board had then given Chanda Kochhar a clean chit following an internal investigation.