The fresh notice has been issued by a new adjudicating officer appointed by Sebi. The officer, who was probing the case earlier, has been transferred from the case.
Typically, a consent application is filed when an aggrieved party wants to settle a case without the main hearing in exchange for a lesser charge or for a more lenient sentence and/or dismissal of certain related charges. This is done by accepting a penal action without admitting or denying the guilt. There’s a time period of 60 days to file the settlement plea after a notice is served. In this case, the deadline expires in December.
Although a consent plea does not mean admission of guilt, the bank’s latest stance is being seen as a departure from its original position. Previously, the bank had denied any wrong doing in the case. The bank, in its earlier response to Sebi, maintained that it was not aware of the alleged conflict of interest in the matter, and hence couldn’t make any disclosures under the listing regulations.
An email sent to ICICI Bank
did not elicit a response. Sources said Sebi’s fresh show-cause had been issued to all entities related to the matter and was largely in line with the previous charges made by the regulator in its first notice issued on May 23, 2018.
The fresh notice is more comprehensive and has cited the findings of former Justice Srikrishna panel, which was tasked to probe the quid-pro-quo transactions in ICICI Bank.
The panel had submitted its report in January. The fresh notice was issued for non-compliance with certain provisions of the erstwhile Listing Agreement and the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Sebi notice asks the recipients to explain why legal action, that includes imposing monetary penalties, should not be taken against them, another person in know said.
The Srikrishana panel report did not elaborate on the bank’s role in the matter. But, it had said Chanda Kochhar’s lack of diligence with respect to annual disclosures implied that the bank’s processes were rendered ineffective by her approach.
The report said this was evident when considered in light of the fact that the bank’s processes were dependent solely on the directors discharging their fiduciary duty to recuse themselves and avoid conflict.
On the basis of a preliminary report, Sebi has concluded that there was conflict of interest in ICICI Bank’s transactions with Videocon. By not disclosing the details of her husband's dealings with Videocon, Kochhar had not complied with the provisions of the listing agreement, prompting Sebi to initiate adjudication proceedings.