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Chanda Kochhar to go on leave till completion of enquiry: ICICI Bank board

Chanda Kochhar to go on leave till completion of enquiry: ICICI Bank board

ICICI Bank’s MD & CEO Chanda Kochhar will go on leave until an independent probe into the alleged clash of interest charges against her is complete. After a marathon meeting, the board of directors of the bank cleared the appointment of Sandeep Bakhshi, who is currently heading ICICI Prudential Life Insurance, as a wholetime director and chief operating officer.

NS Kannan, executive director at ICICI, will now head the bank’s insurance business. All executive directors will now report to Bakhshi, who in turn will report to Kochhar.

Investor protection groups and some stakeholders have been clamouring for the bank to remove Kochhar, who has been under a cloud over conflict of interest allegations.

According a whistle-blower complaint, Venugopal Dhoot’s Videocon Industries made investments in NuPower, a company floated by Chanda Kochhar’s husband Deepak Kochhar, as a quid pro quo for a big-ticket loan from ICICI Bank.

The Central Bureau of Investigation (CBI) has launched a preliminary enquiry into the matter, while market regulator Sebi has served a show-cause notice to Chanda Kochhar and the bank, seeking a response on the allegations.

While the executive directors are unlikely to be amused by the bank’s decision to create an intermediate level between them and Kochhar, the decision of the bank’s board raises more questions than answers.

First, it keeps the door open for Chanda for a comeback if she is absolved of all charges. Also, the reluctance to name an interim CEO has raised doubts over the bank’s corporate governance practices.

 

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