Chanda Kochhar would step down as ICICI Bank Chief ?
MUMBAI : With the board of ICICI Bank deciding on an inquiry into the allegations raised by a new whistle blower against its CEO Chanda Kochhar, calls for her exit have resurfaced.
CICI Bank on Friday denied a recent news report that said CEO Chanda Kochhar has been asked to go on leave until an independent enquiry on alleged cases of impropriety is concluded. “She is on her annual leave which was planned in advance,” ICICI Bank, the country’s largest private sector bank, said in a clarification to stock exchanges.
According to The Mint report, citing sources, had also said that Ms Kochhar has been asked to “proceed on indefinite leave from the company…until an independent inquiry announced by the lender’s board to probe alleged cases of impropriety is concluded.” ICICI Bank’s board also denied that “it has appointed any search committee to find her successor”.
ICICI Bank had said earlier this week that it will institute an inquiry into the allegations raised by an anonymous whistle blower against chief executive Ms Kochhar. The bank is battling allegations that she allegedly favoured Videocon Group in its lending practices.
ICICI, India’s third-biggest lender by assets, said the probe, headed by an independent person, would examine allegations that the chief executive did not adhere to provisions relating to the bank’s code of conduct and whether her actions involved “conflict of interest”.
Market regulator Sebi had also earlier served a notice on Chanda Kochhar on dealings of the bank with Videocon Group and Nupower, an entity in which her husband Deepak Kochhar has economic interests, ICICI Bank said. Appropriate response would be submitted to the Sebi, the bank had said in a stock exchange filing.
The CBI has launched a preliminary investigation into Rs. 3,250 crore loan ICICI Bank had extended to Videocon in 2012 and the possible role of Deepak Kochhar.
“Like similar previous instances in cases of other banks, if Kochhar goes on a leave until the inquiry is completed, it may send out a positive signal to the stakeholders as it will be seen as a sacrifice by her to preserve her reputation.
But on the flip side, such a leave or resignation by a bank’s chief after an anonymous complaint may often create a damaging situation for the bank because if the probe finds any guilt, people may see the bank’s overall policy itself to be flawed.
However, it is an individual decision and the board should use its wisdom carefully in such cases,” said J.N. Gupta, managing director and co-founder of Stakeholder Empowerment Services (SES), a proxy advisory firm.(With Inputs from Agency).
