The enquiry will be headed by an “independent and credible person”, the bank said in a filing to the stock exchanges. The scope of the enquiry will be comprehensive and involve examination of facts as well as use of forensics and of statements of relevant persons. “The enquiry would also cover all connected matters in the course of the investigation to bring the matter to a final course,” it added.
did not respond to Business Standard’s
e-mail queries about the timeline for conducting the probe, name of the person heading the enquiry and the number of people to be involved in the process.
The bank’s whistle-blower policy “encourages employees to report any breach of law, statute or regulation by the bank, issues related to accounting policies and procedures, acts resulting in financial or reputation loss and actual or suspected fraud and criminal offences,” according to its website.
Experts said the inquiry was the result of Sebi’s notice.
has already been investigating the issue and the bank has to give a proper response unlike earlier. Everybody has bits and pieces till now, hopefully this inquiry will help to fit the entire jigsaw puzzle. There is an atmosphere of uncertainty and doubt right now and this inquiry is good for all stakeholders,” said J N Gupta, managing director, Stakeholders Empowerment Services. He had earlier served as Sebi’s executive director.
“The inquiry should have been done long ago. This looks like a consequence of the Sebi
notice, said M Damodaran, chairman, Excellence Enablers, Corporate Governance Advisors. He was former Sebi
chairman. While Damodaran said that managing director and chief executive officer should step down while the investigations are going on, Shriram Subramanian, managing director, InGovern, said “it was not necessary since the allegations came from an outsider.”
The inquiry should be truly ‘independent’ and needs to go beyond the boundaries of ICICI Bank’s dealings. Since the Central Bureau of Investigation (CBI) and Sebi
were investigating the matter, the inquiry should be time bound, Subramanian added.
While the Videocon-NuPower deal is only in the limelight since the last few months, it was first brought to notice two years ago in 2016. In a letter addressed to Prime Minister Narendra Modi dated March 15, 2016, ICICI Bank
shareholder Arvind Gupta alleged that the bank extended loans to the Videocon
group despite their “dubious track record of using fresh borrowings to service their mounting debts.” “A corrupt nexus between ICICI Bank’s chief Chanda Kochhar’s dealings with Videocon
Group chief Venugopal Dhoot
and his family is well established,” he added.
Chairman M K Sharma had said in March that the board had full confidence in Chanda Kochhar
and ruled out any quid pro quo as alleged with regard to certain loan given to the Videocon
group. The bank has started the search for a successor to Sharma whose term ends on June 30, 2018.
The board of the private lender has seen additions to the number of its independent directors lately. Early this month, the board appointed Radhakrishnan Nair as an additional (independent) director for five years. Nair, a commercial banker, has worked with two regulators, first in the capacity of executive director with Sebi
and then as a full-time board member with the Insurance Regulatory and Development Authority of India.
The bank also inducted MD Mallya, another commercial banker, as an independent director for a five-year term. Mallya has been the chairman and managing director of Bank of Baroda and Bank of Maharashtra, and had a three-year stint as an independent director on the board of State Bank of India, post retirement. ICICI Bank’s shares closed at Rs 285.25 on the BSE, down 1.86 per cent from its previous close. The filing came after market hours.
THE STORY SO FAR
2008: Chanda Kochhar's husband Deepak Kochhar and Videocon Chairman Venugopal Dhoot float NuPower Renewables
ICICI Bank announces Chanda Kochhar would take over as MD and CEO next year
2012: ICICI Bank sanctions Rs 32.5 bn loan to Videocon group
2016: Arvind Gupta writes letter to PM on conflict of interest
RBI finds no quid pro quo in Videocon-NuPower dealings
2017: Videocon does not pay back Rs 28 bn out of the total loan taken; ICICI Bank declares it NPA
2018: CBI launches preliminary investigation into the matter
Chanda Kochhar denies allegations, bank board backs MD
Taxmen probe ICICI’s dealing in Videocon-NuPower issue
Sebi serves notice to ICICI, Chanda Kochhar