The enquiry headed by former Supreme Court judge B.N. Srikrishna, investigating the alleged quid pro quo in loans given by ICICI Bank to Videocon Group, has found that former managing director Chanda Kocchar violated the lender's code of conduct and the framework for dealing with conflict of interest.
Kochhar's husband, Deepak Kochhar, had set up NuPower Renewables, a 50:50 joint venture with Videocon Group chairman Venugopal Dhoot, in 2008. A whistle-blower had alleged that ICICI Bank extended loans to various private companies belonging to Videocon Industries just after the complete transfer of ownership and control of NuPower Renewables to Kochhar’s family.
The lender had last year termed the allegations as rumours to malign the reputation of the bank and the management. However, later in June, Justice Srikrishna was appointed to conduct an enquiry into those allegations.
"The enquiry report, with the scope period of April 1, 2009 to March 31, 2018, concluded, primarily on account of ineffectively dealing with conflict of interest and due disclosure or recusal requirements, that 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 lender said on Wednesday.
The enquiry report also talks of lack of diligence on Kochhar's part and her failure to recuse herself and avoid any conflict.
"The enquiry report also 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."
Following the conclusions of the report, the ICICI board has now decided to treat Kochhar's separation as a termination for cause under the bank's internal policies.
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 will have to be revoked. It will also require clawback of all bonuses paid from April 2009 until March 2018.
ICICI has said that the enquiry report will not have any implications on the bank's financial statements for the periods.
Last week, the Central Bureau of Investigation (CBI) had filed a first information report (FIR) against Kochhar, her husband Deepak Kochhar and Venugopal Dhoot, the chairman of Videocon Group.