Former ICICI Bank CEO Chanda Kochhar’s fate was sealed after her husband acknowledged dealings with the Videocon Group continuing over several years in April last year and the board found it difficult to believe her explanation of the sequence of events leading up to the disclosure.
Conversations with officials having direct knowledge of the events show the board lost faith in Chanda Kochhar after her husband’s disclosures and her own attempts to explain the lack of transparency.
Deepak Kochhar, Chanda’s husband and the man at the centre of the controversy, wrote to the board in April 2018 acknowledging his relationship with the Videocon Group. The disclosure came a few weeks after media reports about alleged conflict of interest and the relationship between him and Videocon Group.
This followed a Sebi directive to the ICICI board, asking it to seek a formal letter from Deepak Kochhar detailing his dealings with the VN Dhoot-promoted group.
The letter, which ran contrary to Chanda Kochhar’s assertions, forced the board to confront her and revisit her disclosures under the bank’s code of conduct rules.
Kochhar did not reply to email, SMS or WhatsApp messages. ICICI Bank also did not respond.
Board officials were peeved that Chanda Kochhar had continued to claim even after the events of 2016 that there were no business dealings between her husband and the Videocon Group.
The year 2016 is important because this was when media reports first surfaced about the alleged conflict of interest.
Responding to an internal ICICI inquiry, Kochhar had said there were no business dealings.
While the declarations filed in previous years may have been out of misjudgement, that she maintained there was nothing to disclose even after the initial charges in 2016 led some in the board to believe the non-disclosure may have been “intentional”.
“It is difficult to believe that even in 2017 and 2018 she did not mention anything about the dealings in her filings,” said one of the persons who did not want to be identified. “She may have asked her husband after the first round of charges. If even after that the dealings did not come out, then it was not professional conduct.”
Chanda Kochhar, who was the CEO of ICICI Bank for nearly a decade, and her husband Deepak are facing investigations on several fronts for alleged corrupt practices in sanctioning of loans by the bank as well as payments by businessmen to Deepak’s business. These payments were allegedly made for loans sanctioned by ICICI Bank.
Board members were also stumped by Chanda Kochhar’s explanation of the events and her reasons for not acknowledging the business dealings. It was Kochhar who had submitted to the board a sealed envelope from her husband containing the acknowledgement. When queried about the turn of events, she said she was merely acting as a messenger and that she had no clue about the contents of the envelope.
She had claimed that she and her husband did not share any business details with each other. She cited RBI rules about confidentiality of clients and said she wasn’t aware of his clients either.
In May last year, Chanda Kochhar admitted to the board during a solo presentation that she had learnt about her husband’s business dealings only days earlier. The board found it difficult to believe her and felt the non-disclosure was deliberate.
The board then hired retired justice BN Srikrishna to conduct another probe. Kochhar went on leave of absence in June 2018, and quit in October before the Srikrishna panel could submit its report.
Kochhar’s resignation was converted into a dismissal in January this year and the board decided to claw back the entire bonus paid to her since 2009. The board also revoked all her future entitlements, including medical expenses, and vested and unvested options.