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On Thursday, 29 March, The Indian Express published a report raising questions about the dealings between ICICI Bank and the Videocon Group.
In its investigation, the newspaper detailed a series of transactions between the Videocon Group and NuPower Renewables – a company founded and headed by Chanda Kochhar’s husband Deepak Kochhar – between 2008 and 2013.
Ahead of the publication of The Indian Express investigation, the board of ICICI Bank released a statement on Wednesday expressing full faith in Chanda Kochhar and reiterating that the bank’s credit approval processes are robust. This was followed up by a short press conference by the bank’s chairman where he took no questions.
The clarifications issued by the bank leave a few questions unanswered and raise new ones as well. BloombergQuint has not independently verified the facts presented in the report.
The key question that remains unanswered is about the nature of transactions between Deepak Kochhar’s renewable energy company and the Videocon Group.
Transactions that need explaining include:
To be sure, it is not upto ICICI Bank or its board to clear the air on these transactions. However, in her personal capacity, Chanda Kochhar could choose to address concerns raised in order to protect the standing of the deposit-taking organisation that she leads.
The issue of a conflict of interest in loans approved by Chanda Kochhar-led ICICI Bank to the Videocon Group first came to light in 2016, when a whistleblower raised concerns similar to those in The Indian Express investigation.
To counter these concerns, the board made the following statements on Wednesday, 28 March:
Speaking on Thursday, ICICI Bank Chairman MK Sharma said Chanda Kochhar had not recused herself from meeting related to loan sanctions to the Videocon Group and the board saw nothing wrong with that. Sharma also said that all disclosures necessary as per regulations were made. But questions remain about whether specific disclosures were made.
Videocon Industries, according to a Care Ratings report of June 2016, has a debt of Rs 43,000 core. More than half of it is dollar-denominated and the rest is from Indian lenders. The account, now tagged as non-performing, has been included in the second list of accounts to be referred for insolvency proceedings.
Questions remain about the conduct of the ICICI Bank board as well. The board issued an unequivocal statement on Wednesday saying that it reposes faith in Chanda Kochhar as the Managing Director and CEO and that credit approval systems are robust enough to stave-off conflicts of interest.
Along with the board, the Reserve Bank of India, too, is in a position to ask Chanda Kochhar and ICICI Bank to clarify their position. In Thursday’s press meet the bank’s chairman MK Sharma said, “We have satisfactorily replied to all regulatory questions”. He disclosed no further information on the basis that it was “privileged information”.
(This article was originally published on BloombergQuint)
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