Hyderabad: Trouble for ICICI Bank, the country’s largest private sector lender, does not appear to stop anytime soon as the bank's shareholders bear the brunt since the middle of March following the allegations of nepotism against the top management.
According to a note by US-based investment banking firm Jefferies, ICICI Bank could face a class action suit in the US, if charges of malpractice are proved.
“Emerging risks (for the bank) could be a formalized corruption charge and more such instances coming up, and (the) bank facing a class action suit and a costly settlement," wrote Nilanjan Karfa and Harshit Toshniwal, Jeffer-ies analysts, in their note.
A class action suit is a type of lawsuit in the United States, where a group of people sue a person or a company collectively for loss caused to them by their negligent action. Around a quarter of ICICI Bank’s shareholders have stake in the lender through ADR, which give them right to sue the Indian bank by a class action suit.
ICICI Bank shareholders have lost around Rs 27,000 crore of their wealth since March 15, after a whistleblower accused the bank of favouring Videocon Group founder Venugopal Dhoot, who had invested in NuPower Renewables, a company founded by ICICI Bank MD Chanda Koch-har’s husband Deepak Kochhar. The bank, however, denied all allegations and backed Ms Kochhar.
The bank is also under scanner for an advisory firm owned by Rajiv Kochhar, a brother-in-law of Ms Chand Kochhar.
