The Chief Executive Officer (CEO) and Managing Director of ICICI Bank - Chanda Kochhar, has denied charges of conflict of interest and non-adherence to the code of conduct, levelled against her by SEBI, reports Business Standard.
In a detailed 30 page reply to a show-cause notice issued by SEBI, Chanda Kochhar among other things has said she wasn't aware of the business dealings between her husband Deepak Kochhar - promoter of NuPower Renewables, and Videocon group promoter Venugopal Dhoot.
In May this year, SEBI has issued a show-cause notice to Chanda Kochhar for alleged violation of disclosure requirements under securities law. SEBI also set a deadline of 24 August for her and her bank's reply to the show-cause notice.
The conflict of interest essentially relates to a loan of Rs 3,250 crore given by the bank in 2012 to the Videocon Group just when parties linked to Videocon were about to invest Rs 64 crore in Deepak Kochhar’s solar power business, NuPower Renewables.
The regulator is now expected to call Chanda Kochhar and ICICI representatives for a personal hearing with regards to the adjudication proceedings launched against them.
“The interest of the Videocon group directly or indirectly in the company owned/managed by Deepak Kochhar was never brought to the notice of the MD and CEO since both had their professional life and were bound by respective confidentiality clauses,” she supposedly said in her response to SEBI.
Chanda Kochhar has refuted the charges that she breached the bank’s code of conduct. She claimed that all the requisite disclosures mandated for the top management and senior employees were adhered to.
“The bank procedures are independent of any individual being in a position to influence the outcome. This includes bank executives from the account manager to the head of business, so the cases not meriting processing would not reach the credit committee,” an explanation believed to have been put forth by Chanda Kochhar.
Chanda Kochhar also added that credit committee also has independent directors to vet the loan dealings and her recusal from the credit committee meeting wasn't warranted even as per the law.
On 18 June, when the ICICI Bank board, under pressure from the Life Insurance Corporation (LIC) and independent directors, had asked Chanda Kochhar to remain on leave till Justice B N Srikrishna completed his probe into this alleged conflict of interest. Her tenure formally was to end nine in March 2019 but before the allegations surfaced she was expected to be given an extension until 2021.
The appointment of Sandeep Bakhshi as the chief operating officer (COO) with powers almost equal to the CEO, however, indicated that the situation is more or less end of the road for Chanda Kochhar.
The only situation in which Chanda Kochhar is likely to stay on will be if Justice Srikrishna finds that no conflicts of interest were involved at all – but that seems unlikely.
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