ICICI Bank board may have new chairman next week as M K Sharma retires

Topics Chanda Kochhar

ICICI Bank MD & CEO Chanda Kochhar
ICICI Bank’s board is likely to be recast with more independent directors expected to join in the coming weeks, led by a new chairman.


On Monday, ICICI Bank Managing Director and Chief Executive Officer Chanda Kochhar went on indefinite leave pending a probe against her. The bank appointed Sandeep Bakhshi COO. The decision on the new chairman will be taken at the board meeting next week, since incumbent MK Sharma, 71, will retire by month-end, according to a source. The bank’s board has come under fire from corporate governance experts, large shareholders and regulators for dragging its feet over allegations of quid pro quo made against Kochhar.


But with multiple government agencies, including the Securities and Exchange Board of India (Sebi), seeking information from the bank, the board was pushed to act and appoint former Supreme Court judge BN Srikrishna to investigate the allegations.


The terms of some of the current independent directors would not be renewed since they had failed to protect the interests of stakeholders, the source added. The new independent directors will consist of eminent people, including former bankers.


A former chairman of a large public sector bank had been sounded out to take over as ICICI Bank chairman, but no decision has been taken so far, the source said. Another source said the independent panel led by Srikrishna was likely to be assisted by a six-member team, which would include forensic auditors, international corporate governance experts (since the bank’s American Depository Receipts or ADRs are listed in the US), and lawyers. The final decision on all appointments will be taken by Srikrishna.


ICICI Bank’s board came under fire after giving a clean chit to Kochhar in March without conducting a formal probe into allegations by whistleblower Arvind Gupta. In a communication to the Prime Minister’s Office in 2016, Gupta alleged that Nupower Renewables, a firm owned by Chanda Kochhar’s husband Deepak Kochhar, received a Rs 630 million investment from ICICI Bank’s borrower Videocon Industries. The Rs 32 billion loan to Videocon has turned into a  non-performing asset.


Nupower also received equity investments worth Rs 3.25 billion from Matix group. It is a firm owned by the son-in-law of Essar group promoter Ravi Ruia. A loan taken by Essar group overseas from ICICI Bank has now turned bad. A preliminary enquiry by the CBI was filed in February this year. Videocon, Matix group and ICICI Bank have denied the allegations.


Deepak Kochhar and Nupower are facing investigations by the income-tax department, corporate affairs ministry and Sebi. Recently, Press Trust of India reported that the US Securities and Exchange Commission was also investigating the allegations against ICICI Bank, but the SEC has not made any public comments so far.


With inputs from Anup Roy

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