ICICI Bank goes from backing Chanda Kochhar to reportedly looking for a replacement

Problems galore.
Problems galore.
Image: AP Photo/Michel Euler
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One of India’s most celebrated bankers, Chanda Kochhar, has been in the eye of the storm in the last few months.

Kochhar, the managing director and chief executive officer (CEO) of ICICI Bank, the country’s second-largest private sector lender, has faced allegations of nepotism and favouritism in loan disbursal to NuPower Renewables, a firm founded by her husband Deepak Kochhar.

When the allegations first surfaced in March, the bank’s board robustly defended Kochhar. Since then, however, it has agreed to probe the case. Kochhar, meanwhile, has tried to stay out of the public eye and is now on a planned vacation, according to the bank’s spokesperson.

Now, ICICI Bank is reportedly considering a reshuffle at the top. Till an independent probe into the allegations against Kochhar is completed, the lender may appoint Sandeep Bakhshi, the CEO of its insurance subsidiary, ICICI Prudential Life, as interim CEO.

The bank’s board is also set to meet today (June 18) to decide Kochhar’s fate, according to a Bloomberg report. It is likely that she may be asked to step down, the report says.

Here’s a brief timeline of how trouble has brewed over the last few months:

2008: Deepak Kochhar, along with Videocon group chairman Venugopal Dhoot, sets up NuPower Renewables.

2009: Kochhar takes over the reins at ICICI Bank in May.

2012: NuPower Renewables secures a loan of Rs3,250 crore from ICICI Bank. Before the loan sanction, however, Dhoot transfers a controlling stake in NuPower to an associate, Mahesh Chandra Punglia, who—after securing the loan—sells it to Deepak Kochhar for a mere Rs9 lakh.

2016: Arvind Gupta, a whistleblower, writes to prime minister Narendra Modi and finance minster Arun Jaitley alleging nepotism by Kochhar in the loan extended to NuPower Renewables.

March 2018: The whistleblower’s letter surfaces in a blog. The letter alleges that Kochhar, as joint managing director of ICICI Bank in December 2008, was also a shareholder in NuPower.

On March 29, the Indian Express newspaper cites a conflict of interest in the loans granted by ICICI Bank to Deepak Kochhar’s firm. A day before the report is published, the bank sends out a statement terming the charges against Kochhar as “malicious and unfounded rumours.”

“The board has come to the conclusion that there is no question of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours,” the statement says. However, in spite of the board’s dismissal, the Central Bureau of Investigation (CBI), India’s top investigative agency, initiates a probe.

April 2018: The CBI issues look-out notices against Dhoot, Kochhar, and her husband to ensure that they don’t leave the country without informing the authorities.

On April 05, the government changes its nominee on ICICI Bank’s board. It’s unclear what led to this move, but questions are raised on the board’s hasty decision to clear Kochhar of all charges without a probe.

Then, in April, Kochhar is reportedly accused of not disclosing that her brother-in-law, Rajiv Kochhar, had helped ICICI Bank’s debtors restructure their foreign loans. The lender denies any wrongdoing and argues that there was no financial transaction involved with Rajiv Kochhar. The bank also says that an employee’s husband’s brother isn’t deemed a relative under the Companies Act; therefore, a disclosure wasn’t necessary.

May 2018: The Securities and Exchange board of India initiates an inquiry against Kochhar and the bank for not making adequate disclosures. After defending the CEO for two months, the bank’s board decides to conduct an independent probe into the case.

June 2018: Kochhar goes on her annual planned leave from June 01. A former judge of India’s apex court, B N Srikrishna, is appointed to lead the independent investigation into the whistleblower’s complaint. And now, the ministry of corporate affairs is also investigating NuPower and others firms related to this loan controversy.