ICICI Bank’s growing troubles
1. Companies linked to ICICI Bank controversy come under Ministry of Corporate Affairs (MCA)
2. Since March 2018, one of India’s largest privater lenders – ICICI Bank – and its Managing Director and CEO Chanda Kochhar, have been in the spotlight for all the wrong reasons.
3. The allegations include a potential violation of the bank’s code of conduct and of quid pro quo in dealing with certain borrowers.
4. The ministry is looking at allegations with respect to fraudulent, preferential or under-valued transactions.
5. Last month, markets regulator Securities and Exchange Board of India (SEBI) had served a notice on Kochhar on dealings of the bank with Videocon Group and Nupower.
6. The ministry, which is implementing the Companies Act, has powers to take stringent action against entities for violations.
ICICI Bank Controversy:
7. There are allegations of involvement of Kochhar and her family members in a loan provided to Videocon group a quid pro quo basis.
8. It was also alleged that Videocon Group pumped money into NuPower Renewables, a firm owned by Deepak Kochhar, husband of Chanda Kochhar
9. The controversy came to light last March when the media reported Mr Gupta’s allegations.
ICICI Bank’s reponse:
10. The board of ICICI Bank had reposed confidence in Ms. Kochhar after the issue came to light in March, denying any conflict of interest.
11. ICICI Bank also said that the total loan extended by the lenders’ consortium to the Videocon group, which included Videocon Industries and 12 of its subsidiaries, was around ₹40,000 crore.
12. The bank highlighted the fact that it was not the lead bank in the consortium.
13. The bank said the committee of creditors that sanctioned loans to Videocon was chaired by the then chairman of ICICI Bank, K.V. Kamath, and it included independent and working directors of the bank.
Investigation agency’s reaction:
14. The Central Bureau of Investigation has registered a preliminary enquiry against Deepak Kochhar.
15. However, this inquiry did not name Chanda Kochhar.
16. Last week, the bank’s board ordered a probe by an ‘independent and credible’ person following fresh allegations from another whistleblower against Ms. Kochhar.
17. The allegations include a potential violation of the bank’s code of conduct and of quid pro quo in dealing with certain borrowers.
18. The board’s Audit Committee will appoint the head of the inquiry panel, outline its terms of reference and specify the period covered by the probe.