Ex-ICICI Bank CEO Chanda Kochhar in the dock; law firm withdraws clean chit

Law firm Cyril Amarchand Mangaldas has withdrawn its 2016 report that had given a clean chit to former ICICI Bank chief executive officer (CEO) Chanda Kochhar with regard to nepotism allegations against her, said sources. ICICI Bank in a regulatory filing said the clean chit given to Kochhar in March this year was based on the inquiry report of the law firm which is now saying that the same should no longer be treated as valid.

Following the allegations of nepotism and conflict of interest against Kochhar, the then chairman MK Sharma in March had expressed full confidence in her and ruled out any quid pro quo as alleged with regard to certain loans given to the Videocon Group.

ICICI Bank in a filing said the bank had expressed confidence in Kochhar on the basis of the inquiry report of the law firm which was engaged in 2016 to probe the allegations of nepotism and conflict of interest against her. The inquiry was conducted by law firm Cyril Amarchand Mangaldas, according to the people quoted above.

“The law firm submitted its report in December 2016 stating that it had found no evidence of nepotism and conflict of interest on the part of Kochhar and accordingly the matter was treated as closed,” ICICI Bank said.

When fresh allegations surfaced in March 2018 on the same matter, the board of the bank on the basis of inquiry report of the law firm issued a statement expressing confidence in Kochhar.

Subsequent to the additional whistleblower allegations and further information made available to the bank, the board of directors of the bank announced a fresh inquiry, which was announced on 30 May 2018.

“Further, 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 said.

According to ICICI Bank, the then Chairman of the Board of Directors of ICICI Bank engaged a reputed law firm for conducting an inquiry into the allegations made in media reports. All parties concerned (including the Bank) cooperated with the inquiry and furnished necessary records, documents and statements

Later, ICICI Bank instituted an external inquiry headed by retired Supreme Court judge BN Srikrishna to look into the allegations of nepotism and quid pro quo against Kochhar.

Even as the board stood by her, details of misdoings emerged in the media, leading to a multi-agency probe against Kochhar by various law enforcement agencies.

The cases under scanner include the bank’s ₹3,250 crore loan to Videocon Group in 2012 and the involvement of Kochhar family members, including her husband Deepak Kochhar, in first sanctioning the loan and then restructuring the same.

On 4 October, the bank had informed that Kochhar had quit, six months after reports about allegations of quid pro quo and non-adherence of code of conduct and conflict of interest came out in the open. Kochhar was on leave since June 18 this year pending the independent investigation by Justice Srikrishna.

The board of the bank had accepted the request of Kochhar to seek early retirement. “The board accepted this request with immediate effect. The enquiry instituted by the board will remain unaffected by this and certain benefits will be subject to the outcome of the enquiry,” it had added.

Following her resignations, the ICICI Bank board appointed Sandeep Bakhshi as managing director and chief executive officer for five years until October 3, 2023.

with PTI inputs.