There are six independent directors on the ICICI board, including the bank’s chairman as well as the head of state-owned Life Insurance Corp. of India, which owns about a 9.4 per cent stake, according to data compiled by Bloomberg. The board also includes a government nominee and five executive directors from ICICI.
India’s Central Bureau of Investigation recently started a so-called preliminary enquiry into an alleged nexus between Videocon Chairman Venugopal Dhoot and Kochhar’s husband, according to officials from the agency. A preliminary enquiry is the first step to assess allegations of wrongdoing.
“Your information is totally baseless and incorrect,” an ICICI spokesman said in an email when asked if some board members want Kochhar to step down.
ICICI shares were down 1.6 per cent at 9:56 a.m. Monday in Mumbai, set for the biggest drop in a week, after earlier declining as much as 2.2 per cent. The broader Bankex index of Indian lenders rose 0.5 per cent. ICICI has been the worst performer among private-sector peers on the 10-member gauge since May 2009, when Kochhar took over as CEO, and has a bad-loan ratio that’s one of the highest among its peers. Kochhar is on the bank’s credit committee that approves loans and reviews key borrower accounts.
“If the CEO has to step down, the shares might see a knee-jerk fall and then recover from there on,” said Gaurang Shah, head investment strategist at Geojit Financial Services Ltd. in Mumbai. “Allegations are regarding transactions which have happened in the past and the market has already priced in most of the risks that could come from it.”
couldn’t reach Deepak Kochhar, Chanda’s husband, for comment through phone calls made to NuPower Renewables, where he is CEO and founder. Dhoot has denied any wrongdoing.