Chanda Kochhar Didn’t Need To Recuse Herself From Committee That Approved Videocon Loan: ICICI Bank Chairman
A man walks by an ICICI Bank Ltd. branch in Mumbai (Photographer: Kuni Takahashi/Bloomberg)

Chanda Kochhar Didn’t Need To Recuse Herself From Committee That Approved Videocon Loan: ICICI Bank Chairman

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Questions Yet To Be Fully Answered By ICICI Bank

Towards the end of his brief statement, which mirrored the ICICI Bank board’s press statement issued yesterday, ICICI Bank Chairman MK Sharma listed a few questions received by bank from various media and offered some responses.

Shouldn’t Chanda Kochhar have recused herself from the committee that approved the Rs 3,250 crore loan to the Videocon group, given that her spouse had business dealings with the Group?

Sharma said that the board did not see any conflict of interest as the Videocon Group was not an investor in Nupower. The loan was part of a consortium agreement and hence the board did not see any reason for Kochhar to recuse herself.

But Sharma did not acknowledge that as per an Indian Express report and a whistleblower blog written in 2016, Videocon Group-promoter Venugopal Dhoot was an investor in Nupower.

Did Chanda Kochhar disclose her spouse’s business relationship with the Videocon Group at the time ICICI Bank approved the loan to it?

All Sharma said was that Kochhar has been making all her disclosures in accordance with regulatory guidelines.

He did not mention whether this specific disclosure had been made.

Has banking regulator Reserve Bank of India sought details regarding the ICICI Bank’s and Deepak Kochhar’s transactions with Videocon Group?

Sharma said the bank had “satisfactorily replied to all regulatory questions”. That such communication was part of regular activity and also privileged information. He said the bank will not share any specific details regarding communication with regulators.

Need More Clarification On The Videocon Transaction, Says Hemindra Hazari

The main question is “whether the board was aware that Chanda Kochhar's husband has business dealings with the Videocon group,” said Independent Banking Analyst Hemindra Hazari, in a conversation with BloombergQuint.

Key points he made...

  • Videocon Group has been a borrower from ICICI Bank since the 1990s.
  • Videocon's rating never went higher than BBB, so the bank should clarify why a large loan was given to the group.
  • A bank's managing director has huge bearing on disbursal on giving of loans despite not being chairman of credit committee.

“It is very disappointing when the chairman of such a big bank comes for a press meeting, reads a statement and walks out without taking even one question,” he said, adding that more clarity on the transaction is needed.

No Need For Chanda Kochhar To Recuse Herself From Committee That Approved Videocon Loan, Says MK Sharma

MK Sharma said that CEO Chanda Kochhar was not the chairperson of the committee that sanctioned the loan to Videocon Group. He added that the bank’s board did not see any conflict of interest and that Kochhar has been making all disclosures in accordance with regulations.

Key points he made...

  • Chanda Kochhar was part of the credit committee that approved loan to Videocon Group.
  • The board does not see conflict of interest as Videocon Group was not an investor in Nupower.
  • Board saw no need for her to recuse herself.
  • The loan was part of the consortium arrangement.
  • She has been making all her disclosures in accordance with regulatory guidelines
  • We have satisfactorily replied to all regulatory questions. This is part of regular activity. As it is privileged information we cannot share it.
  • The company will not share any specific details regarding communication with regulators.

ICICI Bank Chairman MK Sharma Reiterates Points Made In Yesterday's Statement Regarding ICICI Bank's Exposure To Videocon Group.

  • The process adopted by ICICI Bank to sanction loan to Videocon Group
  • Consortium of 20 banks to Videocon Group aggregating Rs 40,000 cr
  • ICICI Bank’s exposure to the Videocon Group is part of this facility
  • The bank’s board concluded there was no question of favouritism, nepotism
  • No individual employee has ability to influence decision on credit given by bank

He also said that none of the investors of Nupower Renewables, a company founded by Chanda Kochhar’s spouse Deepak Kochhar, are borrowers of ICICI Bank.

Watch ICICI Bank Chairman MK Sharma's Statement To Media And Expert Responses

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