Mumbai: An inquiry committee commissioned by ICICI Bank to probe certain transactions involving its former CEO Chanda Kochhar said she acted in violation of the bank’s code of conduct and other applicable Indian laws and regulations.
The inquiry report which was tabled before the board of directors on Wednesday also said that the bank's processes were rendered ineffective by her approach.
The report concluded that “…..her lack of diligence with respect to annual disclosures as required by the Bank in terms of its internal policies, the ICICI Bank Code of Conduct and applicable Indian laws, rules and regulations on her interests (direct or indirect) towards avoidance of conflict of interest, when considered that the Bank’s processes were dependent solely on the directors discharging their fiduciary duty to recuse themselves and avoid conflict, implies that the Bank's processes were rendered ineffective by her approach to such disclosures and avoidance of conflict,” it added.
However, the private sector lender clarified that there are no implications of the enquiry report on its published financial statements (Indian or US GAAP) for the relevant periods.
Ms Kochhar quit as CEO of ICICI Bank in October 2018. With the bank treating her resignation as a ‘termination for cause’, it means all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested and unexercised stock options and medical benefits would be revoked.
The bank added that all bonuses paid from April 2009 until March 2018 would also be clawed back.
In a statement, Ms Kochhar said that she is “disappointed, hurt and shocked” by ICICI Bank decision Wednesday evening to treat her resignation as a “termination for cause” after an independent probe indicted her.
“I am utterly disappointed, hurt and shocked by the decision,” said Ms Kochhar.
She was quick to add that none of the credit decisions at the bank are unilateral and the bank has established processes and systems which involve a committee-based collective decision-making.
“The organisational design and the structure obviate the possibility of conflict of interest,” she claimed.
The remarks come days after the CBI named Kochhar, her husband Deepak along with VN Dhoot of Videocon Group and the then entire the entire credit committee members of ICICI Bank who are today heading other large financial institutions, in the FIR.
Based on the report, the bank has decided to treat her resignation as a ‘Termination for Cause’ under its internal policies and take further actions as may be warranted in the matter.
In May 2018, the audit committee of the bank appointed former Supreme Court judge, Justice (Retd) B.N. Srikrishna as the head of enquiry to undertake a comprehensive enquiry on allegations against Ms Kochhar.
He was assisted by a law firm and a forensic and investigative services firm for the conduct of the inquiry.
“Ms Chanda Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations,” the committee concluded.
Only last week, the CBI filed FIR against Ms Kochhar, her husband Deepak and Videocon group MD Venugopal Dhoot in connection with Rs 3,250 crore ICICI Bank-Videocon loan case.
