As ICICI Bank is shrouded in the shadow of the Videocon scam, reports suggest that the bank’s board is divided over CEO Chanda Kochhar continuing in her position.
Quoting anonymous sources, Bloomberg reported on 9 April that some outside directors are opposed to Kochhar continuing with the bank, even as Chairman MK Sharma expressed ‘full faith and confidence’ in Kochhar.
However, when Bloomberg approached ICICI to verify reports of some board members wanting Kochhar’s exit, a spokesperson from the bank termed the reports ‘totally baseless and incorrect’.
News agency PTI also cited sources as saying that Kochhar's continuation at the top post may not find favour from some of the independent directors.
It's for RBI to Decide on Kochhar's Term at ICICI Bank: Finance Ministry Sources
Meanwhile, another report by PTI on 9 April has cited finance ministry sources as saying that it is for the Reserve Bank or ICICI Bank board to decide if Chanda Kochhar should continue at the post.
The ministry is of the view that it is not their role to look into the affairs of private lender ICICI Bank, but the RBI as a regulator could look at allegations heaped against Kochhar, sources in the finance ministry told PTI.
“It is for the RBI to decide if Kochhar should continue to be the CEO and Managing Director of the bank,” they said, adding the regulator or ICICI Bank board is competent to take a decision on continuation of the incumbent CEO.
Kochhar’s tenure at ICICI ends on 31 March 2019.
The board has 12 members, six of which are independent directors – including the chairman and the head of the Life Insurance Corporation Ltd (LIC), which owns about 9.4 percent stake in the board.
The other members of the board include a government nominee and five executive directors from ICICI, reported Bloomberg.
Meanwhile, the CBI has begun a preliminary probe into the dealings between Videocon Chairman Venugopal Dhoot and Kochhar’s husband Deepak Kochhar. The Enforcement Directorate (ED) is also investigating the case.
According to the reports, Kochhar’s husband Deepak Kochhar had formed a joint venture with Videocon promoter Venugopal Dhoot for a business dealing in renewable energy and there were a string of transactions later, which gave him full control of the venture after the exit of Dhoot.
Late last month, the bank admitted that Kochhar did not recuse herself from a credit committee meeting which decided to give a Rs 3,250 crore loan to diversified Videocon Group in 2012, reported PTI.
Global ratings agency Fitch had said on 9 Apri, that it is doubtful about the strength of corporate governance at ICICI Bank.
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