The ICICI Bank has decided to terminate the contract of former managing director and CEO, Chanda Kochhar after the B.N. Srikrishna panel found that she violated the bank’s code of conduct.
The bank also said there would be a clawback of bonuses paid between 2009 and 2019.
In June last year, the bank formed the one-member panel, assisted by a law firm, to look into the allegations of conflict of interest against Ms. Kochhar in relation to a loan given to Videocon Industries.
‘Lack of diligence’
According to a bank statement, the Srikrishna panel report concluded that primarily on account of ineffectively dealing with conflict of interest and due disclosure or recusal requirements, Ms. 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 Enquiry Report also concluded that her lack of diligence … when considered that the bank’s processes were dependent solely on the directors discharging their fiduciary duty to recuse themselves and avoid conflict, implies that the bank’s processes were rendered ineffective by her approach to such disclosures and avoidance of conflict,” the bank said.
Ms. Kochhar, who assumed charge as MD and CEO on May 1, 2009, resigned in October last year.
The bank board, which discussed the report on Wednesday, decided to treat the separation of Ms. Kochhar from the bank as a ‘Termination for Cause’, with all attendant consequences, which included revocation of all her existing and future entitlements, like any unpaid amounts, unpaid bonuses or increments, unexercised stock options, and medical benefits, and requires the clawback of bonuses from April 2009 until March 2018. The bank said there are no implications of the report on its published financial statements.
'Hurt and shocked'
Former ICICI Bank MD and CEO Chanda Kochhar said she was “utterly disappointed, hurt and shocked by the decision.”
“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 are unilateral. ICICI is an institution with established robust processes and systems which involve committee based collective decision making with several professionals of high caliber participating in the decision making. Hence the organization design and structure obviate the possibility of conflict of interest,” Ms. Chanda Kochhar said in a statement on Wednesday.
“I have served ICICI for the last 34 years with all my dedication and hard work. I have never shied away from taking tough decisions whenever required to be taken in the best interest of the organization. This decision from the Bank has caused me immense hurt and pain.
“I have pursued my career as an independent professional with utmost honesty, dignity and integrity. I continue to have faith and belief in my conduct as a professional and I am certain that truth will ultimately prevail,” she said.