ICICI Bank Chairman Reveals Chanda Kochhar Was on Panel That Cleared Videocon Loans
ICICI Bank Chairman MK Sharma said CEO Chanda Kochhar did not recuse from the committee as there was no conflict of interest.
File photo of ICICI Bank CEO Chanda Kochhar. (Reuters)
New Delhi: ICICI Chairman MK Sharma on Thursday revealed that the bank’s Managing Director and CEO Chanda Kochhar was part of the committee that approved loans to the Videocon group, but denied any quid pro quo on the latter’s part.
Addressing a press conference — the second one by the bank in Kochhar’s defence — Sharma denied any conflict of interest.
“The Board doesn’t believe it represents a conflict as Videocon Group is not an investor in NuPower Renewables. Hence, there was no need for Chanda Kochhar to recuse herself from the committee,” Sharma said on Thursday.
ICICI, the country’s largest private bank, is embroiled in a controversy after a blog post highlighted a letter written by one of its shareholders to the Prime Minister and Finance Minister. The letter alleged a nexus between Kochhar’s husband Deepak Kochhar’s NuPower Renewables and Videocon Group Chairman Venugopal Dhoot, and thereby ICICI Bank’s involvement in saving Videocon Group from debt defaults.
The bank’s Board has mounted a strong defence of Kochhar, saying it has full faith and confidence in her and described reports against her regarding as "malicious and unfounded rumours". The board, after a meeting late on Wednesday, concluded that there was no favouritism or conflict of interest in granting of loans to Videocon Industries.
"No individual employee, whatever may be his or her position, has the ability to influence the credit decision at the bank,” the ICICI Bank said in a BSE filing after the board meeting.
The board added that the bank’s credit approval process, “where multiple independent departments are involved in providing independent credit risk rating, doing credit appraisal, credit approvals and monitoring the proposals, are well-structured and standardised”.
The bank said that the larger exposures are approved by the Credit Committee of the Board, which has majority members as independent directors of the bank.
On its loan exposure to Videocon Group, ICICI Bank said it was not the lead in the consortium of 20 lenders that granted loans to the conglomerate. ICICI Bank’s loan exposure to the group stood at Rs 3,250 crore, which was less than 10 percent of the total consortium facility given in April 2012, cleared by a Credit Committee chaired by then Chairman of ICICI Bank and pointed out that “Ms Chanda Kochhar was not the Chairperson of this Committee”.
In 2012, a consortium of over 20 banks and financial institutions sanctioned facilities to the Videocon Group (Videocon Industries Ltd and 12 of its subsidiaries/associates as co-obligors) for a debt consolidation programme and for the group’s oil and gas capital expenditure programme aggregating approximately Rs 40,000 crore.
“ICICI Bank’s share of the banking sector’s exposure to the Videocon Group was less than 10 percent, while around 90 percent of the loans were sanctioned by other banks and financial institutions,” the filing said.
The Bank also clarified that “none of the investors of NuPower Renewables are borrowers of ICICI Bank”.
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