The ICICI bank on January 30, 2019, has finally accepted that the bank’s ex-CEO and MD Chanda Kocchar has violated the company code of conduct. The bank, ten months ago had given Chanda Kocchar a clean chit on allegations of nepotism, conflict of interest, favouritism, or quid pro duo, however, yesterday scrapped it off after an independent investigation conducted by retired Supreme Court judge Justice BN Srikrishna found Kocchar guilty, reported the Economic Times.
The bank on the basis of the investigation sacked Kocchar and also decided to retrieve all bonuses that she enjoyed since 2009, after taking charge of the top post. The accusation comes less than a week after the Central Bureau Investigation (CBI) booked Chanda Kocchar, her husband Deepak Kocchar, and Videocon group MD Venugopal Dhoot.
Why was Independent Probe Required?
A committee headed by Justice BN Srikrishna started probing the matter to find whether Chanda Kocchar violated the code of conduct by not recusing herself in case of the Videocon loan. Soon after the Videocon loan issue surfaced after an investigative report done by The Indian Express, the ICICI bank made an internal enquiry and defended Kocchar. However, the matter did not die down and the bank agreed to conduct an independent probe where it found her to be guilty. After considering the report issued by Justice Srikrishna, the ICICI bank in a statement said that Board of Directors decided to treat the separation of Ms Chanda Kocchar from the bank as a ‘Termination for Cause’ under the Bank’s internal policies, schemes and the Code of Conduct. Soon after the bank’s conclusion, Chanda Kocchar expressed that she is hurt, disappointed and shocked by the fact that the bank believes that she had violated the code of conduct, reported NDTV. She further added that none of the credit decisions was her own as the bank opted for collective decision making. Emphasising the bank’s structure, Kocchar said that conflict of interest is out of the question.
What Happened Earlier?
The CBI on January 24, 2019, booked ex ICICI MD and CEO Chanda Kochhar, Deepak Kochhar, and Venugopal Dhoot in the ICICI-Videocon cheating case. CBI booked Chanda Kocchar on charges of criminal conspiracy, cheating and abuse of official position for “dishonestly sanctioning to the Videocon Group”, reported the Economic Times.
Kochhar, who resigned from the CEO posts of ICICI bank on October 2018, was accused in the CBI FIR of allegedly receiving “illegal gratification through her husband, Deepak Kochhar, from Videocon MD VN Dhoot for sanctioning a term loan of Rs 300 crore to Videocon International Electronics Ltd”.
Apart from registering the First Information Report (FIR) in the ICICI-Videocon loan fraud case, the investigative agency also raided several locations. Of these Mumbai offices of Videocon, Deepak Kochhar’s NuPower Renewables, and Supreme Energy Pvt Ltd were on the top list.
The investigative agency has also mentioned several unknown public servants in the FIR. CBI further mentioned that senior banks officials such as former chairman KV Kamath (current president of New Development Bank), Sandeep Bakshi (current ICICI Bank MD), Sonjoy Chatterjee (CEO, Goldman Sachs India), Zarin Daruwala (CEO, Standard Chartered India), Rajiv Sabharwal (CEO, Tata Capital), Homi Khusrokhan, and K Ramkumar might also be probed related to the case, as they were in the sanctioning committee that cleared loans amounting to Rs 1,575 crore.
Quick Recap:
An investigative report by The Indian Express claimed that Rs 2,810 crore out of the Rs 3,250 crore loan has not yet been paid and the account of Videocon was declared non-performing asset (NPA) in 2017. The ten-month-old report by The Indian Express says that Videocon chairman Dhoot started a joint company, NuPower Renewables Pvt Ltd (NRPL), with Deepak Kochhar and two of the latter’s relatives in December 2008. Dhoot had a 50% share in NRPL whereas the other 50% of shares were owned by Kochhar, and Pacific Capital, a company owned by his father and Chanda Kochhar’s brother’s wife.
After just a month, in January 2009, Dhoot resigned from the position of director of NRPL. He also went on to transfer his 24,999 shares in the company to Kochhar for Rs 2.5 lakh.
Additionally, Supreme Energy Private Limited, a company in which Dhoot reportedly has 99.9% stake, lent a loan of Rs 64 crore to NRPL, in March 2010 and by the end of the month, Supreme Energy went on to become 94.99 % shareholder in NRPL. This step was preceded by a series of transfer of shares first between Dhoot and Kochhar and later between Pacific Capital and Supreme Energy.
In November 2010, as per reports, Dhoot went on to transfer his entire shares in Supreme Energy to Mahesh Chandra Punglia, his associate.
Punglia transferred his holding in Supreme Energy to Pinnacle Energy, where Deepak Kochhar was the managing trustee. The total value of the transfer of shares amounted to Rs 9 lakh.
Supreme Energy…
