Facing enquiry over charges of nepotism and conflict of interest, ICICI Bank managing director and CEO Chanda Kochhar on Thursday quit the bank, six months before her current tenure was to end.
Kochhar, 57, has also resigned from all subsidiaries of the bank including ICICI Securities where she had sought reappointment as the chairperson. The board elevated Chief Operating Officer (COO) Sandeep Bakhshi as the new managing director and CEO for five years until October 3, 2023, ICICI Bank said in a statement.
The bank further said that the external enquiry instituted by the board against Kochhar in May will continue and the benefits to her would be subject to the outcome of the probe. Following the board’s decision to institute an enquiry by retired Supreme Court Justice B N Srikrishna, Kochhar went on leave in May.
There are allegations of involvement of Kochhar and her family members in a loan provided to Videocon group on a quid pro quo basis. “The enquiry instituted by the Board (against Kochhar) 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 statement said.
“The Board of Directors of ICICI Bank accepted the request of Chanda Kochhar to seek early retirement from the Bank at the earliest,” it said. Kochhar’s current five-year tenure as CEO was to end on March 31, 2019. After Kochhar went on leave, ICICI Bank appointed Bakhshi, who was MD and CEO of ICICI Prudential Life Insurance, as the chief operating officer of the bank with effect from June 19.
Bakhshi has now been elevated as managing director and CEO. “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,” it said.
Bakhshi, a Mechanical Engineer from Punjab Engineering College, Chandigarh, started his career with ICICI Ltd in 1986. He looked after the corporate clients for the Northern and Eastern regions of ICICI Limited before joining ICICI Lombard in 2002. His work responsibilities included business development, project appraisals, project monitoring and business restructuring.
Meanwhile, independent director M D Mallya too resigned from the board for health reasons. Shares of ICICI Bank closed at Rs 315.55, up 3.94 per cent on the BSE even as the benchmark index Sensex plunged by more than 2 per cent. There are allegations of involvement of Kochhar and her family members in a loan provided to Videocon group on a quid pro quo basis.
It was alleged that Videocon Group pumped money into NuPower Renewables, a firm owned by Deepak Kochhar, husband of Chanda Kochhar. There are also allegations that NuPower got investments of Rs 325 crore from Mauritius-based Firstland Holdings, a company owned by Nishant Kanodia, son-in-law of Essar Group co-founder Ravi Ruia.
The investments from Ruia’s son-in-law’s firm into NuPower started in December 2010. Incidentally, the same month ICICI Bank was the lead banker in a consortium of Indian banks that extended a USD 530 million loan to Essar Steel Minnesota LLC on December 29, 2010.
This loan was later classified as NPA. The Reserve Bank in its 2016 investigation in the matter had raised questions over the ownership of the Mauritius-based entity, First Land Holding, which had invested Rs 325 crore in NuPower.