THE GOVERNMENT will not interfere in the functioning of India’s largest private lender, ICICI Bank, which is facing allegations of conflict of interest and code-of-conduct violations by its Managing Director and CEO Chanda Kochhar, a top official told The Indian Express.
“We will maintain complete non-interference in ICICI Bank affairs. We are just observing it from outside,” said the official in response to a query on suggestions that the government should wield its power to influence the bank’s affairs in the wake of these allegations.
The remarks by the official, who is aware of the government’s position on the issue, is significant since the government has a nominee on the bank’s board. The government also controls Life Insurance Corporation of India (LIC), which commands about 9.4 per cent stake in the bank and also has a member on the board.
“The government has maintained a similar stance of non-interference in matters connected to insolvency proceedings going on in NCLAT (National Company Law Appellate Tribunal). Let the processes take care of these matters,” the official said. Among the cases with NCLAT are those of Anil Ambani-owned RCom, and firms associated with the Shriram and Essar groups.
The latest indication of the government’s position on these issues comes in the backdrop of the ICICI Bank’s board deciding to set up an “enquiry” into a fresh complaint by a whistleblower alleging non-adherence to the code of conduct, “conflict of interest” and “quid pro quo” by the bank’s CEO while dealing “with certain customers/ borrowers”.
The move was in contrast to an earlier decision where the board gave a clean chit to Kochhar on alleged conflict of interest and quid pro quo in granting loans to Videocon.
As first reported by The Indian Express on March 29, Videocon group promoter Venugopal Dhoot provided crores of rupees to NuPower Renewables Pvt Ltd (NRPL), a firm he had set up with Deepak Kochhar and two relatives, months after his company got Rs 3,250 crore as loan from ICICI Bank in 2012.
Six months after receiving the loan, Dhoot transferred proprietorship of the company to a trust owned by Deepak Kochhar for Rs 9 lakh. The Videocon account was declared a Non Performing Asset in 2017, with almost 86 per cent (Rs 2,810 crore) of the loan unpaid.
The CBI initiated a preliminary enquiry into the issue while other agencies, including the Enforcement Directorate, launched parallel investigations.
The ICICI Bank board’s decision to institute a probe came days after market regulator SEBI issued a notice to the bank and Kochhar for alleged non-compliance of the listing agreement in the Videocon case.