Ten months after giving clean chit to Chief Executive Chanda Kochhar over the Videocon loan, ICICI Bank sacked her on Wednesday with retrospective effect.
The drastic move came after Justice Srikrishna Committee indicted her for violation of bank's code of conduct and conflict of interest duties in the controversial Rs 3,250-crore loan for the Videocon Group.
Reacting to the devlopment, Kochhar said that none of the credit decisions at the bank was unilateral and that truth would eventually prevail.
"ICICI is an institution with established robust processes and systems which involve committee-based collective decision-making with several professionals of high calibre participating in the decision-making."
"I am utterly disappointed, hurt and shocked by the decision. I have not been given a copy of the report. I reiterate that none of the credit decisions at the bank is unilateral.cture obviate the possibility of a conflict of interest," she said in a statement.
The core of the allegations against Kochhar is that a part of the 'dirty loan' went to a company run by her husband Deepak Kochhar.
More action against Kochhar to follow?
The latest development clears the decks for the government's investigating agencies--CBI, ED, IT, SFIO--and overarching regulatory bodies--RBI, SEBI and Ministry of Corporate Affairs-- to take appropriate action against all the accused in the case filed by CBI last week as they deem fit. It is learnt that the Justice Srikrishna Enquiry Report will be forwarded by the ICICI Board to all the probe agencies and regulators for immediate action.
Meanwhile, Kochhar added that she was not provided with a copy of the Srikrishna Committee report.
On its part, the bank on Wednesday said it has received the Enquiry Report from retired Supreme Court Justice B.N. Srikrishna which concluded primarily on account of ineffectively dealing with conflict of interest and due disclosure or recusal requirements that Kochhar "was in violation" of the ICICI Bank code of conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations".
The report also concluded her lack of diligence with respect to annual disclosures as required by the bank in terms of its internal policies, the ICICI Bank code of conduct and applicable Indian laws, rules and regulations on her interest (direct or indirect) toward avoidance of conflict of interest.
The Bank said in a release that following the receipt of the Enquiry Report and its due consideration and the conclusions thereat, after due deliberations, the Board of Directors decided to treat the 'separation' of Chanda Kochhar from the Bank as a 'termination for cause' under the Bank's internal policies, schemes and the code of conduct with all attendant consequences.
This included revocation of all her existing and future entitlements such as any unpaid amount, unpaid bonuses or increments, unvested and vested and unexercised stock options and medical benefits. The Board's decision will also require "clawback" of all bonuses paid from April 2009 until March 2018 and to take such further actions as may be warranted in the matter.
The bank also noted that there were no implications of the Enquiry Report on its published financial statements (Indian or US General Accepted Accounting Principles) for the relevant periods.
Last week, the CBI lodged an FIR against 57-year-old Chanda Kochhar, Deepak and Videocon Managing Director V.N. Dhoot besides four companies in connection with the controversial loan. As part of a quid pro quo, Dhoot allegedly invested Rs 64 crore in NuPower Renewables Pvt Ltd run by her husband. She had stepped down from the post of CEO and MD in October last year after media expose of the loan saga. Her tenure in the Bank was to end this March.