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Srikrishna Probe: Chanda Kochhar sacked after found guilty of breaking the rules

FE Bureau

An independent enquiry led by Justice BN Srikrishna has found former ICICI Bank MD & CEO Chanda Kochhar guilty of failing to discharge fiduciary duties and breaching rules relating to conflict of interest.

The enquiry followed allegations that Kochhar had not made adequate disclosures and followed rules relating to loans given to Videocon Group with which her husband Deepak Kochhar had financial dealings. The enquiry revealed Chanda Kochhar did not follow disclosure norms.

The lender said on Wednesday its board has decided to treat Kochhar s separation as a termination of her services under the lender s internal policies. Kochhar s existing and future entitlements, including unpaid bonuses or increments, unvested and vested & unexercised stock options and medical benefits, will be taken away. The bank will also claw back all bonuses paid to her from April 2009 until March 2018 and take any other action as may be warranted.

The lender said in a statement that the findings of the enquiry do not have any implications on the published financial statements (Indian or US GAAP) for the relevant periods.

Kochhar failed to respect the lender s disclosure norms and other rules, the enquiry found. This was critical given the bank s processes are dependent solely on directors discharging their fiduciary duties and recusing themselves to avoid conflict.

Kochhar went on leave in June last year pending the probe into allegations of a conflict of interest in the lender awarding loans to Videocon Group.

The bank’s audit committee on June 6, 2018 appointed former Supreme Court judge BN Srikrishna as the head of enquiry (HOE) to undertake a comprehensive enquiry into allegations against Kochhar. The report was confined to the period between April 1, 2009 and March 31, 2018.

Last week, the Central Bureau of Investigation (CBI) registered a case against Kochhar, her husband Deepak Kochhar, MD of Nupower Renewables, in connection with the alleged irregularities in the Rs 3,250 crore ICICI Bank-Videocon loan case.

It is alleged that Videocon Group MD Venugopal Dhoot provided Rs 64 crore to NuPower Renewables (NRPL), a firm he had set up with Deepak Kochhar and two relatives six months after the Videocon Group got Rs 3,250 crore as loan from ICICI Bank in 2012.

A consortium of 20 banks led by State Bank of India (SBI) had sanctioned Rs 40,000 crore loan to Videocon Group. Almost 86% of ICICIBank s share of Rs 3,250 crore loan (Rs 2,810 crore) remains unpaid. The Videocon account was declared a non-performing asset (NPA) in 2017.

Dhoot is believed to have transferred the proprietorship of NuPower to a trust owned by Deepak Kochhar for Rs 9 lakh, six months after he received the loan from ICICI Bank.

Besides Chanda and her husband Deepak, the CBI also named Dhoot and related companies.