Kochhar had been earlier sent on leave after the bank started an independent probe into allegations of conflict of interest
ICICI Bank shareholders on Thursday voted in favour of having Chanda Kochhar on the board of ICICI Securities, highly-placed sources told Moneycontrol. The bank holds 80 percent stake in ICICI Securities. The vote effectively seals Kochhar’s position as the director at ICICI Securities.
Kochhar, Chief Executive Officer (CEO) and Managing Director (MD) of ICICI Bank has been on leave since June and the bank is conducting an independent enquiry against her. A panel supervised by former Supreme Court judge BN Srikrishna is probing allegations of conflict of interest relating to loans given to Videocon group, which had investments in a firm founded by Kochhar's husband.
“It (Kochhar’s reappointment) is unfortunate. Ideally, she should have recused herself and the company itself should have put her in a tight spot. The board or the bank being the larger shareholders have voted for her," said Shriram Subramanian, Managing Director of InGovern, an independent corporate governance research and advisory firm.
"Now the question that arises is whether the Board of ICICI Bank is sort of keen to get to the bottom of this case or it (her being on leave and holding the enquiry) is just an eyewash,” he said.
He said it is always an unequal relationship between majority and minority shareholders. “So, even if ICICI Bank as shareholders would have abstained from voting, the rest of the decision would have been left on the other minority shareholders.”
On Thursday, the lender had refuted market regulator Securities and Exchange Board of India (SEBI)'s charge that it violated disclosure norms in the matter of loans granted to Videocon, by saying that it was unaware of any conflict of interest at that point in time.There are allegations of impropriety on part of Kochhar in ICICI Bank extending loans to some companies and enjoying reciprocal benefits.
It has been alleged that her family members, including her husband Deepak Kochhar, got financial favours from the borrowers against the loans sanctioned by the bank.
Sebi has already served a notice on Kochhar on dealings of the bank with Videocon Group and Nupower. An independent probe has also been launched by ICICI Bank board to look into the matter.
There are eight members on the board of ICICI Securities of which four are independent directors, two are non-executive non-independent directors who are nominated from ICICI Bank and two are whole time directors.
Two members Managing Director & CEO Shilpa Kumar and Executive Director Ajay Saraf are the whole-time directors on the board of ICICI Securities.ICICI Securities, Headquartered in Mumbai, offers financial services including brokerage, financial product distribution and investment banking, catering to both retail and institutional clients