Chanda Kochhar says “Was Not Aware of Videocon’s Deals”


The Managing Director of ICICI Bank and the Chief Executive Officer Chanda Kochhar, has been facing allegations of conflict of interest and the non-adherence to the code of conduct, has declined the charges equalized against her by markets regulator Securities and Exchange Board of India.


In her acknowledgement to the absolve and a show cause notice which was issued by Securities and Exchange board  of India, She said, she wasn’t aware of the business dealing between the husband Deepak Kochhar, the promoter of the NuPower Renewables and the Videocon Group promoter Venugopal Dhoot. The sources even said that Chanda had given a 30 page reply to Sebi wherein she had cited few points in her defence.

The regulator would now be calling Chanda and the ICICI Bank’s representatives for the personal hearing as a part of the judgment proceedings which were launched against both. “The interest of the Videocon group directly or indirectly in the company owned/managed by Deepak Kochhar was never brought to the notice of the MD and CEO, since both had their professional life and were bound by respective confidentiality clauses,” she is said to have told Sebi.

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Refuting the charges of breach of code of conduct, Chanda has claimed that all the requisite disclosures were adhered to by her as per the extant code of conduct of the bank mandated for the top management and senior employees, according to sources.

The bank procedures are independent of any individual being in a position to influence the outcome. This includes bank executives from the account manager to the head of business, so the cases not meriting processing would not reach the credit committee,” ICICI Bank’s chief is said to have explained in her reply.

Besides, the credit committee also has independent directors to vet the loan dealings, she has said in her reply. She also said that recusal from the credit committee meeting wasn’t warranted, not only in the absence of knowledge but also as per the law.

Chanda has elaborated the chronology of events, her limited role in the loan disbursement, particularly in the case of Videocon Industries, and the process involved in the sanctioning of corporate loans, said a source.

Her reply to Sebi

  • Adhered to all disclosure norms according to bank’s code of conduct
  • Was member of the credit committee but without veto
  • Attended only eight of the 30 meetings held for the Videocon loan sanction
  • Recusal from credit committee not warranted
  • Independent directors also vetted the dealings
  • kc

According to the records, the credit committee of ICICI Bank, in 2012, sanctioned its share of facilities to the Videocon group. Chanda was not the committee’s chairperson. It was a 12-member committee headed by then chairman K V Kamath. Besides, ICICI Bank gave part (Rs 32.5 billion) of the Rs 400-billion loan approved by a consortium of 20 banks.

Chanda has clarified that she was only part of the committee without any veto power. Further, she claimed to have attended only eight out of the 30 meetings held for the Videocon group ever since she took over as MD and CEO of the bank. According to her, no fresh disbursal was made to the group while the loan moved to consortium-based lending. Kochhar has also apprised Sebi of the current status of outstanding loans to the Videocon group.

The lender is said to outstanding dues of Rs 28.1 billion from the Videocon group. The group was classified as a non-performing asset (NPA) in 2017. She also mentioned that the business dealings between Videocon Industries and ICICI Bank had existed since 1985. Chanda joined the bank in 1984 as a management trainee. Currently, she is on indefinite leave until an independent probe under former Supreme Court judge B N Srikrishna against her is concluded.

Sebi had set a deadline of August 24 for the bank and her to reply to the show-cause notice over alleged violations of listing disclosure norms. Both Chanda and ICICI Bank have submitted separate replies to Sebi. An email sent to ICICI Bank did not elicit any response. On May 23, Sebi had issued a show-cause notice based on the preliminary enquiry. Sebi has alleged that there was a potential conflict of interest in the transactions of ICICI Bank with the Videocon group.

By not disclosing the details of her husband’s dealings with Videocon, she had not complied with the provisions of listing agreement. Therefore, adjudication proceedings were initiated by Sebi against ICICI Bank and Chanda.

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