Proxy advisory firms, top corporate lawyers and banking sector experts feel that the board of ICICI Bank could have disclosed more information on the role of its chief executive officer Chanda Kochhar in the entire process of lending to Videocon Industries, as its promoter Venugopal Dhoot allegedly has business transactions with Kochhar’s husband Deepak Kochhar.
“It is good that the board of ICICI Bank has chosen to respond to allegation instead of keeping quiet. However, some additional disclosures and a few more facts could have been given by them. I think the story started surfacing in 2016 and have continued since then so the board could have appointed an external agency to look into it like Infosys did earlier,” said Amit Tandon, co-founder and MD of advisory firm IIAS.
Sandeep Parekh, founder of Finsec Law Advisors too said that an independent investigator should look into the allegations. “The issues that need to be looked into is ethics and conflict of interest and not related party disclosures given by the head of the bank,” said Parekh.
Another top corporate lawyer said while technically it may be difficult to prove any wrongdoing on part of Chanda Kochhar, the board could have given better disclosures in the case. “Kochhar’s recusal from the process of credit approval in case of Videocon Industries could have been one way to handle it.”
On Thursday, a day after The Indian Express reported about an alleged impropriety and a possible conflict of interest in ICICI Bank’s Rs 3,250 crore loan to Videocon group, MK Sharma, the bank’s chairman, admitted that Chanda Kochhar, was part of the credit committee which sanctioned the loan but did not recuse herself from the committee.
“The board doesn’t believe it represents a conflict as Videocon group is not an investor in NuPower Renewables. Hence, there was no need for Chanda Kochhar to recuse herself from the committee,” Sharma said in a conference addressing television channels.
“From governance point of view the issue is bad optics for the bank to have their chief executive office being dragged into such controversy,” said JN Gupta, managing director of Stakeholders Empowerment Services.