'Malicious, Unfounded': ICICI Bank On Allegations Against Chanda Kochhar

Mumbai: Coming out strongly in support of its Managing Director and Chief Executive Officer Chanda Kochhar, after reports of conflicts of interest and impropriety in connection with disbursal of a loan of Rs 3,250 crore to the Videocon Group, ICICI Bank, on Thursday, called these allegations as "unfounded" and "malicious". "It is important to note here that all banks including ICICI Bank disbursed the rupee term loan into a common escrow pool account which was being maintained for this purpose by the lead bank. So it was not even (that) the disbursement was made directly by bank to the Videocon Group," ICICI Bank Chairman M K Sharma said in a press conference held at the bank's Bandra Kurla Complex office in Mumbai.

Videocon Group owes Rs 2,810 crore of the Rs 3,250 crore loan. The group account was declared a non-performing asset (NPA) last year. The allegation, published in various newspapers is that, Chanda Kochhar's husband Deepak Kochhar had a business relationship that amounted to a joint-venture.

Reiterating that the board strongly stands by Chanda Kochhar, Mr Sharma said, "The board concluded that there is no question or scope of any favouritism, nepotism on the part of the managing director given the architecture of the sanctioning of all loans by the credit committee which comprises independent directors. No individual employee, whatever his or her position may be, has the ability to influence the decision on credit given by the bank."

Mr Sharma added that Chanda Kochhar had made the necessary disclosures to ICICI Bank. "I would like to state that she has been making all her disclosures in accordance of the Companies Act and the Banking Act.  There have also been questions raised as to whether regulators reached out to us for queries. I would like to clearly state that we satisfactorily replied to all the questions of all the regulators," he said.

Explaining that there was no need for Chanda Kochhar to recuse herself from the committee that sanctioned the loan to the Videocon Group, Mr Sharma said, "Mrs. Kochhar was part of the credit committee which sanctioned this facility to the Videocon Group. The board doesn't see the any conflict of interest in any manner since Videocon Group is not an investor of NuPower Renewables Pvt Ltd. Hence there was no need to recuse herself from this committee. As mentioned earlier, this committee has many independent directors and the committee was not chaired by her."

As per a media report, Venugopal Dhoot of Videocon Group, in 2008, set up a company with Deepak Kochhar. Mr Dhoot later gave Rs. 64 crore loan to this company through an entity owned by him. Later, he transferred the ownership of this entity to a trust headed by Deepak Kochhar for a meagre amount of Rs. 9 lakh.The transfer of the company to Deepak Kochchar happened six months after the Videocon Group got a loan of Rs. 3,250 crore from ICICI Bank. Almost 86 per cent of that loan (Rs. 2,810 crore) remains unpaid.