Former ICICI Bank CEO Chanda Kochhar, who had to step down following allegations of nepotism and conflicts of interest, lost the confidence of the bank board after her husband Deepak admitted to links with the controversial Videocon Group.
ICICI Bank had earlier extended a loan of 32.5 billion rupees (US$457.3 million) to Videocon and Chanda Kochhar was one of the members of the bank’s sanctioning committee.
Shortly after the loan was disbursed, Videocon Managing Director Venugopal Dhoot gave a loan of 640 million rupees ($9 million) to NuPower Renewable Ltd, run by Deepak Kochhar. Critics claimed that this was an indication of a quid pro quo between the two.
The ICICI Bank loan extended to Videocon was subsequently declared a non-performing asset owing to defaults.
Deepak Kochhar reportedly disclosed his links with Videocon in a letter to the ICICI Bank board in April, 2018. After this, the board lost faith in Chanda Kochhar and her explanations found little favor among its members, Economic Times reports.
This was followed by a directive by stock market regulator Securities and Exchange Board of India to the ICICI board, asking it to seek a formal letter from Deepak Kochhar detailing his dealings with Videocon Group.
The letter forced the board to confront her and revisit her disclosures under the bank’s code of conduct rules.
When interrogated by the Enforcement Directorate (ED), Chanda Kochhar said she was not solely responsible for sanctioning loans to corporate clients, and that it was a collective decision of the entire credit committee.
She also told investigators that she was not aware of her husband’s business dealings with the Videocon group and its Managing Director.
The ED is investigating trails of kickbacks allegedly paid by companies to get loans sanctioned. Another round of questioning is likely next week.
So far, no such quid pro quo angle has been found in the case of other committee members who were part of the sanctioning committee.