ICICI Bank on Wednesday said that an independent inquiry has found that its former Chief Executive Officer Chanda Kochhar had violated its code of conduct.
The bank’s board said it has decided to treat Kochhar’s resignation as “termination for cause” after Justice (retired) BN Srikrishna concluded that there was lack of diligence on the former banker’s part with respect to annual disclosures.
The bank said it would stop the payment of unpaid benefits, including bonus, to Kochhar and retrieve all bonuses paid from April 2009 until March 2018.
Kochhar resigned in October after questions were raised about a Rs 3,250-crore loan that the bank had given the Videocon group in 2012. Six months after the loan was sanctioned, Videocon Chief Executive Officer Venugopal Dhoot allegedly provided crores of rupees to NuPower, a company founded by Chanda Kochhar’s husband Deepak Kocchar.
Last week, the Central Bureau of Investigation filed a case against Chanda Kochhar, Deepak Kochhar, and Dhoot. The CBI officer leading inquiries in the case was transferred on January 23, a day after signing the first information report.
Here is the full text of the bank’s statement:
Pursuant to the decision of the Board of Directors of ICICI Bank on May 29, 2018, the Audit Committee of the Bank had on June 6, 2018 appointed former Supreme Court judge, Hon’ble Mr. Justice (Retd.) B. N. Srikrishna as the Head of Enquiry (HOE) to undertake a comprehensive enquiry on allegations against Ms. Chanda Kochhar. The HOE was assisted by a law firm, and a forensic and investigative ervices firm for the conduct of the enquiry.
The Bank has received the Enquiry Report from HOE, and the Board of Directors considered the same at the Board Meeting held on January 30, 2019.
The Enquiry Report, with the scope period of April 1, 2009 to March 31, 2018 (unless specific information required enquiry into transactions or facts of an earlier period), concluded, primarily on account of ineffectively dealing with conflict of interest and due disclosure or recusal requirements, that Ms Chanda Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.
The Enquiry Report also concluded that her lack of diligence with respect to annual disclosures as required by the Bank in terms of its internal policies, the ICICI Bank Code of Conduct and applicable Indian laws, rules and regulations on her interests (direct or indirect) towards avoidance of conflict of interest, when considered that the Bank’s processes were dependent solely on the directors discharging their fiduciary duty to recuse themselves and avoid conflict, implies that the Bank’s processes were rendered ineffective by her approach to such disclosures and avoidance of conflict.
The Bank notes that there are no implications of the Enquiry Report on its published financial statements (Indian or US GAAP) for the relevant periods.
Following the receipt of the Enquiry Report, and due consideration of the Enquiry Report and the conclusions thereat, after due deliberations, the Board of Directors decided to treat the separation of Ms Chanda Kochhar from the Bank as a ‘Termination for Cause’ under the Bank’s internal policies, schemes and the Code of Conduct, with all attendant consequences (including revocation of all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested & unexercised stock options, and medical benefits), and require the clawback of all bonuses paid from April 2009 until March 2018, and to take such further actions as may be warranted in the matter.
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