Some shareholders in attendance from different cities were also disheartened given the lower-than-expected dividend declared by the bank at Rs 1.5 per share, an analyst said
ICICI Bank’s board and senior management faced one of their toughest questions from shareholders on the allegations troubling the lender for over five months now.
The country’s largest private bank held its 24th annual general meeting (AGM) on September 12 in Vadodara.
Shareholders expressed disappointment over 'total failure of corporate governance', performance and accountability of the directors, especially the bank’s Managing Director and CEO Chanda Kochhar, said an analyst present at the AGM.
Interestingly, Kochhar was missing at the AGM. She is on an indefinite leave due to allegations levelled against her for irregularities in sanctioning of loans to few corporate groups, especially the Videocon group.
Kochhar will remain on leave till the probe against her by an external inquiry panel led by former Supreme Court judge BN Srikrishna is complete.
In August end, the bank’s Chairman Girish Chandra Chaturvedi said the probe report will be out in the next three months.Key highlights from the AGM:
- Corporate governance and accountability
- Attempt to raise slogans against the CEO and her husband Deepak Kochhar
- Objection to Chanda Kochhar's re-appointment as Director of ICICI Securities
- Poor '15 minute' evaluation of Kochhar’s performance
- Low dividend payout of Rs 1.5 per share of face value Rs 2.
Chaturvedi clarified that matters relating to the MD and CEO are currently under investigation and it would be premature for the bank to comment on it.
At the AGM, the analyst said, a shareholder stated that the bank’s overall growth of 6.5 percent for the past five years has been the slowest for a private sector bank. “Yet, the salaries of the top management are comparable to American perks, while the American corporate governance didn’t come…There is a need to find accountability and serious introspection.”
Apart from raising corporate governance and performance issues within the bank, shareholders also expressed disappointment at the board’s decision to re-appoint Kochhar as Director on the board of ICICI Securities.
Another shareholder raised suspicion on the board's neutral and independent functioning questioning Kochhar’s clean chit given in '15 minutes, while agencies are taking over 2 months to arrive at a conclusion'.
Sandeep Bakhshi, who was addressing his first AGM as Chief Operating Officer (COO) of ICICI Bank, admitted to previous corporate governance issues, but assured to take the right steps.
"We should wait for the outcome. In the meanwhile, I can assure shareholders that we have ring-fenced the bank functioning from this event. As a bank, we are putting our best foot forward and maximise the opportunity and serve society with the highest standards of governance," Bakhshi said.
He clarified that there was no order or penalty from markets regulator SEBI. "There was a show cause notice and the matter is pending adjudication. The MD and CEO is on leave pending investigation and is not attending office of the bank or its subsidiaries. It would not be appropriate on behalf of the board to pre-judge anything pending investigation against her," he said.
He added that there is no penalty or fine on the bank by US regulator Securities and Exchange Commission.
Arvind Gupta, the activist shareholder who first flagged the issue in October 2016, said, “It is only the beginning and I am happy that the shareholders are asking the right questions. The bank must bring out the study, scope and terms of reference of the investigation.”
On government nominee Lok Ranjan missing the AGM, Gupta said, “It only speaks poorly of corporate governance issues. Even independent directors are prisoners of promoters.”Some shareholders in attendance from different cities were also disheartened given the lower-than-expected dividend declared by the bank at Rs 1.5 per share, another analyst said.