Bank to retrieve Bonuses she received since 2009
WEB DESK
A probe panel headed by former Supreme Court Judge B N Srikrishna has found that former chief executive CEO and managing director of ICICI Bank Chanda Kochhar violated the bank’s code of conduct in the Videocon loan case. Based on the findings of the report submitted on Wednesday, ICICI Bank has decided to take back all bonuses given to her between April 2009 and March 2018, and also revoke all benefits and stock options.
The bank said Kochhar “ineffectively” dealt with “conflict of interest and due disclosure or recusal requirements,” while deciding on loans given to the Videocon Group, where her relatives had a close business interest.
“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,” a statement from the bank, citing the report, said. The committee investigated her role since April 2009, when she was named the CEO, to March 2018.
“With the former CEO having separated from the bank and the completion of the enquiry, the bank’s role in the matter is now to cooperate with regulatory and government authorities and processes. And we would move forward with sharp focus on business,” Sandeep Bakhshi, managing director and chief executive of the bank, said.
In June last year, the bank had announced that Kochhar would be on leave till the probe was completed and appointed Bakhshi as chief operating officer and interim CEO. Bakhshi officially took charge as CEO in October, as Kochhar sought early retirement.
The bank had stated that the probe into Kochhar would continue and the Srikrishna report was supposed to be released in November 2018 but was delayed. After the probe report was submitted Wednesday morning, the bank board met to treat Kochhar’s separation from the bank as a ‘Termination for Cause’, as per the bank’s internal policies.
The bank said it would revoke “all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested & unexercised stock options, and medical benefits), and require the clawback of all bonuses paid from April 2009 until March 2018.” The bank statement added it would also take further actions as warranted in the matter.
As per the annual reports of the bank, Kochhar may have to return Rs 9.82 crore in bonuses she received as the CEO, and may have to give up close to 6 million shares of the bank she had the options of.
An investigation led by Srikrishna is in sharp contrast with the stance taken by the bank’s board when the allegations first came to light in March 2018.
At the time, the board, led by then chairman MK Sharma, had backed Kochhar saying all due processes were followed.
“How is it that MK Sharma, the earlier board chairman gave Chanda Kochhar a clean chit while this board chaired by GC Chaturvedi says she has violated the bank’s code of conduct?” said Hemindra Hazari, an independent banking analyst.
“I expect Kochhar to challenge her dismissal in court where more details of how the board concluded its decisions will be made public. It also shows how overpaid the top CEOs are in private sector banks,” he added.
On January 24, CBI booked Kochhar on charges of criminal conspiracy, cheating and abuse of official position for “dishonestly sanctioning loans to the Videocon Group”.