Srikrishna will investigate whether Kochhar violated the bank’s code of conduct and if she was involved in quid pro quo transactions with certain bank borrowers
ICICI Bank has appointed former Supreme Court judge BN Srikrishna to conduct an investigation into various allegations of impropriety against the bank's chief executive officer Chanda Kochhar, as per a report in The Economic Times.
The bank had said it would be instituting an inquiry into the accusations at the end of May.
The inquiry is in relation to the allegations of quid pro quo deals in the loans given by ICICI Bank to the Videocon Group. Venugopal Dhoot, the founder of Videocon Group was an investor in the business venture of Deepak Kochhar, husband of Chanda Kochhar.
“The board felt he would be the best person to conduct this inquiry. He has accepted the request. Justice Srikrishna is an independent and credible name, who has a good understanding of the financial markets," the report quoted an anonymous source.
ICICI Bank didn’t respond to e-mail queries by Moneycontrol.
So far, Kochhar has refused to make any statement beyond what the bank's Board has said. The board has fully supported Kochhar and ruled out any "conflict of interest" in the giving loans to the corporate group.
The report said Srikrishna will investigate whether Kochhar violated the bank’s code of conduct and if she was involved in quid pro quo transactions with certain borrowers of ICICI Bank.
The former judge was chairman of the Financial Sector Legislative Reforms Commission (FSLRC) and is currently heading a committee of experts deliberating on a data protection framework for the country.
Successor for Chanda Kochhar?
In a related development, directors on ICICI Bank's nomination panel are readying a succession plan for the CEO and managing director's post amid the allegations.
The nomination panel first discussed a fortnight ago plans to assess potential candidates to succeed Kochhar when her term ends in March 2019, according to a Mint report.
“Although the names of the potential candidates for new CEO have not been finalised, the committee has kept a succession plan ready.... The committee may appoint a headhunting firm for shortlisting a new CEO. The terms of appointment have been discussed,” the report quoted two people citing anonymity.
Moreover, Kochhar's third three-year term is set to end on March 31, 2019.
While many experts have called for Kochhar's resignation, as of now she is on an "annual leave", the duration of which is yet unknown.
Independent director Dileep Choksi heads the board’s governance, remuneration and nomination committee. ICICI Bank chairman MK Sharma, and director VK Sharma, who is also chairman of Life Insurance Corporation (LIC) of India, are the other two members of the panel.
Meanwhile, markets regulator Securities and Exchange Board of India (Sebi) has already begun a forensic audit into the dealings of ICICI Bank since Kochhar’s appointment as the CEO on May 1, 2009.On 10 June, PTI had reported that US markets regulator Securities and Exchange Commission, too, has started a probe into the bank’s dealings. This has been denied by ICICI Bank.