ICICI Bank’s Chanda Kochhar, who is facing allegations of conflict of interest over a loan to Videocon Group that had in turn lent to a company part-owned by her husband, has quit as the bank’s Chief Executive Officer and Managing Director. The inquiry against her will continue.
The bank has appointed its Chief Operating Officer Sandeep Bakhshi as the new CEO and MD with immediate effect, ICICI Bank said in an exchange filing.
In reaction, the shares of ICICI Bank rose, settling over 4% higher at Rs. 315.95 apiece in Mumbai trading. In contrast, the benchmark BSE Sensex plunged 806 points, or 2.24 per cent, to settle at 35,169.16 amid worsening investor sentiment.
“The Board of Directors of ICICI Bank Limited accepted the request of Chanda Kochhar to seek early retirement from the Bank at the earliest. The Board accepted this request with immediate effect.
“The enquiry instituted by the Board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry. Kochhar will also relinquish office from the Board of Directors of the Bank’s subsidiaries,” the company said in the filing.
Bakhshi’s tenure at the helm of ICICI Bank will be for five years.
“His appointment will be for a period of five years until October 3, 2023, subject to regulatory and other approvals. The other terms and conditions of his appointment, such as remuneration, would remain unchanged,” the filing said.
Separately, the bank’s Independent Director MD Mallya has resigned due to bad health, which the lender has accepted.
The decision of the 56-year-old Kochhar brings to an end her nine-year reign as the top executive of the bank.
In 2009, Kochhar was appointed as MD and CEO of the bank and has been responsible for the bank’s diverse operations in India and overseas.
Kochhar’s alleged conflict of interest came out in the open in March this year after media reports referred to a Rs 3,250-crore loan granted by ICICI Bank to Videocon Group, whose chairman Venugopal Dhoot had business links with her husband Deepak Kochhar. It was alleged that Dhoot transferred a considerable portion of the loan to a company he jointly owned with Deepak Kochhar.
The media expose was based on a complaint filed by a whistleblower, who flagged Kochhar’s alleged impropriety and conflict of interest in a letter to the Prime Minister and the Finance Minister.
The bank initially termed the charges against Kochhar as “malicious and unfounded rumours” but after relentless public gaze, and regulatory pressure, the lender ordered a probe into the whole issue.
Currently, former Supreme Court judge B.N. Srikrishna is heading an independent inquiry into the allegations.
The bank had on May 30 announced that its Board decided to institute a “comprehensive enquiry” to look into an anonymous whistleblower’s complaint alleging that Kochhar had not adhered to provisions relating to the bank’s “code of conduct.”
In June, Kochhar decided to proceed on leave.
Thereafter, Sandeep Bakhshi was appointed as the wholetime Director and Chief Operating Officer (COO) of the bank.