Chanda Kochhar Indicted And Sacked By ICICI For Violating Code, Has To Return Rs 350 crore Worth Of Shares And Bonuses

An independent inquiry has indicted former CEO of ICICI Bank Chanda Kochhar for violating the ICICI's code of conduct and internal policies, The bank has also decided to treat her resignation as ‘Termination for Cause’ and stop all unpaid retirement benefits and recover bonuses paid to her since 2009.

The development comes days after the Central Bureau of Investigation’s (CBI’s) decided to book former ICICI Bank CEO Chanda Kochhar, her spouse Deepak Kochhar, and Videocon group managing director Venugopal Dhoot for corruption in the sanction of large loans to the Videocon group,

The charges against the Kochhars include criminal conspiracy, cheating, corruption and receipt of illegal gratification for the sanction of six loans totalling to Rs 1,875 crore by the bank between 2009 and 2011, decisions which were allegedly influenced by a sweetheart deal of Rs 64 crore to Deepak Kochhar’s company from Dhoot. (Read the details here and here). The loans turned bad in 2017, saddling the bank with huge non-performing assets.

Chanda Kochhar resigned as CEO and managing director of the bank in October after allegations surfaced that that she favoured Videocon Group, a consumer electronics and oil and gas exploration company, in the bank's lending practices. The bank board has also asked retired justice B N Srikrishna to probe conflict of interest charges against Chanda Kochhar when she was part of the loan sanction committees.

According to the bank, Justice Srikrishna led panel observed that Kochhar violated bank policies and rules. Based on the findings, the ICICI Bank board has advised “further action as may be warranted in the matter”.

The Srikrishna panel further concluded  there was lack of diligence with respect to annual disclosures as required by the bank in terms of its internal policies and violation of Code of Conduct and applicable laws. ICICI Bank CEO Sandeep Bakhshi said the bank had put out a statement on Kochhar and the lender’s role now was limited to cooperating with regulatory agencies.

In a statement after the indictment by the Justice BN Srikrishna-led committee, ICICI Bank said that due to the ‘termination for cause’ under the bank’s internal policies and code of conduct, the bank would revoke all her existing and future entitlements estimated to be worth Rs 350 crores. Those would include any unpaid amounts, unpaid bonuses or increments, unvested, vested and unexercised stock options and medical benefits, and also require the claw-back of all bonuses paid between April 2009 and March 2018.