As the curtains fall on Chanda Kochhar’s career after nearly a decade at the helm at ICICI Bank, an era in Indian banking has ended.
One of India’s most celebrated bankers, Kochhar stepped down as managing director and CEO of India’s second-largest private lender by assets yesterday (Oct. 04). The bank informed the stock exchanges that Kochhar’s request for an early retirement had been approved.
Her departure comes around six months after nepotism allegations against her surfaced. The first woman to head ICICI Bank was accused of unfairly granting loans to NuPower Renewables, a firm founded by her husband, Deepak Kochhar.
Even though these allegations were first levelled against her by a whistleblower in 2016, the issue gained momentum only in March 2018. Since then, suggestions that she needed to step down had grown louder. In June, Kochhar proceeded on a period of indefinite leave.
Since then, Sandeep Bakhshi, formerly the CEO of ICICI Prudential Life, the bank’s insurance subsidiary, was inducted as whole-time director and chief operating officer to steer the ship. Now, Bakhshi will take over as managing director and CEO of ICICI Bank.
Here’s a look at the events that led to Kochhar’s abrupt exit from the corner office:
2008: Entrepreneur Deepak Kochhar, along with Videocon group chairman Venugopal Dhoot, sets up NuPower Renewables. The firm is established as an independent power producer (IPP) in the renewable energy sector.
2009: Kochhar succeeds KV Kamath to take over as the ICICI Bank’s chief in May.
2012: A consortium of 20 banks and financial institutions lends Rs40,000 crore ($5.44 billion) to the Videocon group and 12 of its subsidiaries. Out of this, ICICI Bank also grants about Rs3,250 crore to NuPower Renewables.
Before the loan gets sanctioned, Dhoot transfers a controlling stake in NuPower to an associate, Mahesh Chandra Punglia. After the loan approvals, Punglia sells his stake to Deepak Kochhar for a mere Rs9 lakh.
2016: Arvind Gupta, a whistleblower, writes to prime minister Narendra Modi and finance minster Arun Jaitley, leveling conflict of interest and nepotism allegations in the loans extended by ICICI Bank to NuPower Renewables. However, the ICICI Bank board avoids a probe and the issue dies down.
March 2018: The whistleblower’s letter surfaces on a blog. This comes close on the heels of a scam at state-owned Punjab National Bank (PNB), which sent the industry itself into a tailspin. This time, the allegations don’t go unnoticed.
However, the board assiduously backs Kochhar, calling the contents of the letter and other reports about it “malicious and unfounded rumours.” But this time the Central Bureau of Investigation (CBI), India’s top investigative agency, launches a probe.
April 2018: The CBI issues look-out notices against Dhoot, Kochhar, and her husband to ensure they don’t leave India furtively. Later, it summons Deepak Kochhar for questioning.
Meanwhile, the government changes its nominee on ICICI Bank’s board. Even though no reasons are offered, the Kochhar row is believed to be the trigger, as questions were raised on the board giving her a clean chit in haste.
Amidst all this, Kochhar is accused of not disclosing that her brother-in-law, Rajiv Kochhar, had helped ICICI Bank’s debtors restructure their foreign loans. The bank once again backs Kochhar and defends her on the grounds that there was no financial transaction involved with Rajiv Kochhar. The lender also argues that an employee’s husband’s brother isn’t deemed a relative under the Companies Act, and so, disclosures aren’t needed.
May 2018: India’s market regulator, the Securities and Exchange Board of India (SEBI), initiates an inquiry against Kochhar and the bank for not making adequate disclosures. Finally, the board also gives in and decides to conduct an independent probe into the case.
June 2018: The ministry of corporate affairs launches a probe. A former judge of the supreme court, B N Srikrishna, is appointed by the bank to lead the investigation into the loan controversy.
Kochhar goes on her annual planned leave, the bank says. It is later announced that Kochhar’s leave will continue till the probe against her is completed. In her absence, the bank creates a new position to oversee and manage the lender’s business, and appoints Bakhshi.
October 2018: A month before an independent probe by the Srikrishna panel is reportedly set to be submitted to the bank’s non-executive chairman, Kochhar hangs up her boots.
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