ICICI Bank: Top Law Firm Cyril Amarchand Mangaldas Withdraws Report That Cleared Kochhar

Fresh whistleblower allegations and new information lead ICICI Bank-appointed law firm to change its stance on Chanda Kocchar.

Chanda Kochhar, managing director and chief executive officer of ICICI Bank, at the BANCON conference in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
Chanda Kochhar, managing director and chief executive officer of ICICI Bank, at the BANCON conference in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

One of India’s leading law firms, Cyril Amarchand Mangaldas, recently withdrew its investigative report of 2016 that had given Chanda Kochhar a clean chit, according to a person close to the development speaking on the condition of anonymity.

The law firm was engaged by ICICI Bank Ltd.’s board to investigate allegations of nepotism made by a whistleblower pertaining to loans extended by the bank to the Videocon group. These loans were extended at a time when Videocon was also an investor in a business owned by Deepak Kochhar, husband of then chief executive officer and managing director of ICICI Bank, Chanda Kochhar.

At the time the law firm had found no evidence to support the whistleblower’s allegations, said the person quoted above, and hence had cleared Kochhar. But the law firm subsequently discovered that not all facts had been shared with it and hence recently withdrew the report, the person said.

BloombergQuint was not able to ascertain whether the bank concealed information from the law firm or the board did not have adequate information itself at the time.

When asked to confirm the withdrawal of the report, ICICI Bank told BloombergQuint that due to new developments the law firm said its earlier report would no longer be valid.

The bank’s statement to BloombergQuint and the stock exchanges said:

  • When a media report in 2016 alleged nepotism and conflict of interest on the part of Chanda Kochhar, the chairman of the bank’s board engaged a reputed law firm to conduct an inquiry into the allegations.
  • All concerned parties (including the bank) cooperated with the inquiry and furnished necessary records, documents and statements.
  • The law firm’s report, submitted in December 2016, said it found no evidence supporting the allegations against Kochhar and the matter was treated as closed.
  • But “additional whistle-blower allegations and further information made available to the bank” prompted the need for a fresh inquiry as announced on May 30, 2018.
...the bank informed the law firm about the said developments, whereupon the law firm expressed that its earlier report would no longer be valid.
ICICI Bank Statement - Oct 23, 2018

Cyril Amarchand Mangaldas refused to comment on the withdrawal of its report. “As a rule we do not comment on client matters,” the firm said in response to a BloombergQuint query.

The Kochhar Saga So Far...

Earlier in October, Kochhar had stepped down as the head of the bank after nine years at its helm. Her resignation came even before the probe into alleged impropriety in granting of loans by the bank to the Videocon group was completed. That probe led by retired Justice Srikrishna will continue, said the bank while adding that “certain benefits” would be dependent on the outcome of the investigations.

The allegations had first come to light in 2016 and resurfaced in March this year when the Indian Express detailed a series of transactions between the Videocon Group and NuPower Renewables between 2008-2013.

At first, the board of ICICI Bank rubbished the allegations and backed Chanda Kochhar. In a March 28 statement, the board of ICICI Bank said that it has full faith in her. The board termed allegations of a conflict of interest in Kochhar’s dealings with the Videocon Group as “malicious and unfounded rumours”. It went on to say that there is “no question or scope of any favoritism, nepotism or quid-pro-quo.”

But a series of external inquiries and further whistleblower information finally prompted the bank to set up an internal probe.

  • On March 31, the CBI said it is conducting a preliminary enquiry into the matter. It named Deepak Kochhar (Chanda Kochhar’s husband), the Videocon Group and unknown others.
  • On April 3, Deepak Kochhar’s NuPower Renewables got a tax notice as the Income Tax Department started to look at possibilities of evasion.
  • On April 16, the bank disclosed that capital market regulator SEBI had sought clarifications based on news reports alleging conflict of interest. The bank has duly responded to this, the lender said.
  • Reports suggested that the RBI, which had looked into the matter in 2016, was also relooking at the case.

On June 18, ICICI Bank announced that Chanda Kochhar will go on leave and a committee headed by restired Justice Srikrishna would look into allegations against her. The report of the committee is yet to be finalised.

Following Kocchar’s exit, Chief Operating Officer Bakshi was elevated as the new managing director and CEO for five years until Oct. 3, 2023.