The ICICI Bank will hold its first board meeting on Monday ever since the alleged conflict of interest involving CEO Chanda Kochhar and Videocon group came to light last week. However, the bank said the “routine” meeting was called to review insolvency cases before the National Company Law Tribunal. The ICICI received another jolt after the RBI last week imposed a penalty of Rs 58.9 crore on it for violating the central bank’s guidelines governing treasury operations, one of the heaviest monetary levies by a regulator on a bank for violation of regulations in recent years.
A bank official said the board meeting was routine in nature and refused to divulge any details whether the conflict of interest issue would be discussed. “ICICI Bank’s board meeting being held today is a pre-scheduled board meeting convened for review of cases which are before National Company Law Tribunal under Insolvency and Bankruptcy Code, and other routine matters,” the bank said in a BSE filing.
The bank is involved in a host of insolvency cases filed against companies that have taken a loan and have declared themselves bankrupt. On Saturday, the Hyderabad bench of National Company Law Tribunal (NCLT) initiated insolvency proceedings against Lanco Teesta Hydro Power in a petition filed by ICICI bank under Insolvency and Bankruptcy Code (IBC). In the plea, ICICI said the company failed to repay a loan of Rs 3.13 billion to the bank after the 500-Mw hydropower project, which was supposed to be commissioned in 2012, remained unfinished.
The bank said the board had been meeting regularly in the first week of April in previous years too. “It’s important to note that the board has been meeting regularly in the first week of April in the previous years too, to review progress in resolution of large cases,” it said.
The CBI and the Income-Tax department have already commenced a preliminary inquiry into transactions and money flows in the ICICI Bank-Videocon case. The Indian Express had reported that Videocon chief Venugopal Dhoot gave Rs 64 crore in 2010 through a fully owned entity to NuPower Renewables Pvt Ltd (NRPL), which he had set up with Deepak Kochhar and two of his relatives. He transferred proprietorship of the company to a trust owned by Deepak Kochhar for Rs 9 lakh, six months after he received a loan of Rs 3,250 crore from ICICI Bank.
The amount was part of the Rs 40,000-crore loan that the Videocon Group secured from a consortium of 20 banks led by SBI. Almost 86 per cent of the Rs 3,250 crore loan (Rs 2,810 crore) remains unpaid. The Videocon account was declared an NPA in 2017.
Meanwhile, shares of ICICI Bank plunged 7 per cent on Monday, wiping out Rs 11,353 crore from its market valuation during the morning trade. The stock tanked 7 per cent to Rs 258.90 on BSE. At NSE, shares of the company slumped 7 per cent to Rs 258.80. The stock was the worst hit among the blue-chips on both Sensex and Nifty during the morning trade. Shares of Videocon Industries also fell 4.97 per cent to Rs 12.42 – its lower trading permissible limit for the day – on BSE.