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Indrita Ganguly


BUSINESS
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2 MIN READ

Chanda Kochhar Found Guilty of Violating ICICI's Code of Conduct

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indzganguly944
3 months ago
3 months ago
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Chanda Kochhar was the CEO of ICICI bank. She is recognized for shaping Indian retail banking. She was born in Jodhpur, Rajasthan. She spent most of her early years there but after finishing her school she moved to Mumbai. Chanda Kochhar joined ICICI in 1984 as a management trainee. She handled various projects for many Textile, Petrochemical and Cement industries. She was later promoted to the position of assistant general manager in 1994 following the company’s decision to jump into the commercial banking sector. 

Why is Chanda Kochhar in the news recently?

The ex CEO is currently in the news for all the wrong reasons. She has been found guilty of violating the company's code of conduct. Her husband's company NuPower renewables is at the centre of all this as they had received an investment from the Videocon group as a quid pro quo for a loan from the bank.  

This issue was first raised by a whistle-blower who wrote to RBI and the Prime Minister accusing Kochhar of corporate misconduct and conflict of interest when she had sanctioned the loan to the Videocon group, but no action was taken against her. However, last year a newspaper published an investigation based on the whistleblower’s allegations.

Initially, all the allegations were denied by the company and even the chairman sided with Kochhar saying that she had made all the necessary disclosures. But the board decided to launch an investigation based on the whistle blowers report. A loan of rupees 3,250 cores was given to Videocon in the year 2012 but it later turned out to be a non-performing asset. A preliminary enquiry was registered by CBI to look into the connection between Deepak Kochhar and the Videocon chairman although she herself wasn’t named in the inquiry. ICICI bank borrowers had availed the services of a firm called Avista Advisory Group which is owned by Kochhar's brother in law. But the bank denied availing services from this group. They also said that the brother of a husband doesn’t fall under the companies act and hence this relationship didn’t need to be disclosed.

The Justice Srikrishna committee found Chanda Kochhar guilty of violating the code of conduct and enquired whether she has made all the necessary disclosures about her husband's and brother in law's businesses. The chairman of ICICI had commented that they did not see any problem as the Videocon group isn’t an investor for NuPower renewables. 

The issue however refused to die down and the bank agreed to start a probe by Justice Srikrishna that would be independent and he has found Kochhar guilty for not saving herself from the committee which was responsible for sanctioning the loan to Videocon and she did not make the necessary disclosures. Chanda Kochhar decided to retire early by resigning from her post and the bank accepted her resignation and after the report given by the Justice Srikrishna committee, many benefits were taken away from Kochhar and she was sacked. 

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