Even as the ICICI Bank board initially maintained there was no question of any quid pro quo or conflict of interest on the part of its MD and CEO Chanda Kochhar with regard to the Rs 3,250-crore loan given to Videocon Group and transactions between its promoter and her husband, sources said there is an emerging divide within the board on the issue of backing Kochhar.
While it is learnt that ICICI Bank chairman M K Sharma has held one-on-one calls with some major investors in the bank, two sources who have been part of this exercise said that it has been communicated to them that the board is increasingly receptive to look into their concerns regarding Kochhar as opposed to its earlier stance of unflinching support to her.
“At first, the board squarely stood behind Chanda Kochhar but in recent meetings they told us that the organisation was bigger than an individual and that the board is looking into investors’ concerns,” said the CEO of a mutual fund with significant investments in ICICI Bank.
A top official with a leading global financial services firm said that foreign institutional investors and other large investors of the bank are concerned over the development. “Among FII investors, there are questions on her performance, too, since the bank has also lagged behind well-run private sector banks in generating returns for investors,” he said.
While the government replaced its nominee director on ICICI Bank board on April 5 and appointed Lok Ranjan, Joint Secretary, Department of Financial Services, Ministry of Finance, a source close to the development said that LIC chairman V K Sharma and Lok Ranjan recently met and discussed the issue. LIC holds a 12.37 per cent stake in ICICI Bank.
The investors, however, aren’t quite concerned, as of now, about their holdings in the bank. Said the CEO of another mutual fund having a stake in the bank: “ICICI Bank is a large organisation and the current issue relates to an individual and not the bank. So we are not too worried about our investments.”
While an email questionnaire sent to ICICI Bank chairman M K Sharma and LIC went unanswered, a top government official played down suggestions of interfering in ICICI Bank’s affairs. Qhen asked “The issue concerns millions of depositors,” the top official told The Indian Express. “There should not be any adventurous move that jeopardizes the interests of depositors.”