ICICI Bank Lists Probes Chanda Kochhar Is Facing In A Disclosure To U.S. SEC

ICICI Bank Ltd. gave the U.S. regulator details of three investigations into allegations of impropriety that the private lender and its Managing Director and Chief Executive Officer Chanda Kochhar are facing.

The Central Bureau of Investigation, a former Supreme Court judge and the stock market regulator are probing a whistleblower's allegations into loans to the Videocon Group, according to its filing to the Security Exchange Commission. The loans, granted as part of a consortium, have since turned bad. The lender has to make disclosures to the U.S. regulator since its American depository receipts are listed on the NYSE.

Kocchar came under the scanner as her husband Deepak Kochhar's company NuPower Renewables Pvt. Ltd. had business dealings with Venugopal Dhoot, the promoter of the Videocon Group. She has gone on a leave pending the probe against allegations of impropriety. The lender named Sandeep Bakhshi chief operating officer who will report directly to the board—the central bank today approved his appointment.

CBI Probe

The CBI is enquiring into the conflict-of-interest allegations against ICICI Bank on its loans to the Videocon Group, ICICI Bank said in the filing. The complaint was filed by an anonymous whistleblower in March, according to the disclosure. “The Central Bureau of Investigation had initiated a preliminary enquiry against various individuals and firms including unknown officials of the bank.”

Justice Srikrishna Probe

The private lender also appointed former Supreme Court judge BN Srikrishna to investigate the allegations against Kochhar, it said.

“The allegations include nepotism, quid pro quo and claims that Kochhar, by not disclosing conflicts of interest caused by certain transactions between certain borrowers of the bank and entities controlled by Kochhar's husband, committed infractions under applicable regulations and the Bank's Code of Conduct,” it said.

SEBI Show-Cause

The Securities and Exchange Board of India issued a show-cause notice to the bank and Kochhar in May 2018 related to the allegations, the private lender said. The bank is in the process of responding to the relevant claims in the notice.

Last week, Bloomberg reported that SEC had sought details from ICICI Bank on its accounting and corporate governance practices for five years up to 2016, quoting people familiar with the matter. The bank responded to requests for information from the U.S. regulator's investigatory staff regarding an enquiry relating to the timing and amount of the lender's loan impairment provisions taken under U.S. GAAP.

In the event that the bank or individuals associated with it are found by any of the three enquiries to have violated applicable laws or regulations, they could be subjected to legal and regulatory sanctions that may materially and adversely effect on ICICI Bank's results of operations, financial condition and reputation, the bank said as part of the annual 20-F filing.

Shares of ICICI Bank closed 1.6 percent lower after falling as much as 2.6 percent in a flat Mumbai market.