Not aware of husband's dealings with Videocon, says Kochhar in 30-page reply to Sebi

The regulator will now call Chanda and ICICI Bank’s representatives for a personal hearing as part of adjudication proceedings launched against them. 

ICICI Bank’s Managing Director and Chief Executive Officer Chanda Kochhar, facing allegations of conflict of interest and non-adherence to the code of conduct, has denied the charges levelled against her by markets regulator Securities and Exchange Board of India. 

In her reply to a show-cause notice issued by Sebi, Chanda Kochhar said she was not aware of the business dealings between husband Deepak Kochhar, promoter of NuPower Renewables, and Videocon group promoter Venugopal Dhoot. 

Sources said Chanda gave a 30-page reply to Sebi in which she cited several points in her defence. 

The regulator will now call Chanda and ICICI Bank’s representatives for a personal hearing as part of adjudication proceedings launched against them. 

“The interest of the Videocon group directly or indirectly in the company owned/managed by Deepak Kochhar was never brought to the notice of the MD and CEO, since both had their professional life and were bound by respective confidentiality clauses,” she is said to have told Sebi. 

Refuting the charges of breach of code of conduct, Chanda has claimed that all the requisite disclosures were adhered to by her as per the extant code of conduct of the bank mandated for the top management and senior employees, according to sources. 

“The bank procedures are independent of any individual being in a position to influence the outcome. This includes bank executives from the account manager to the head of business, so the cases not meriting processing would not reach the credit committee,” ICICI Bank’s chief is said to have explained in her reply. 

Besides, the credit committee also has independent directors to vet the loan dealings, she has said in her reply. 

She also said that recusal from the credit committee meeting wasn't warranted, not only in the absence of knowledge but also as per the law. 

Chanda has elaborated the chronology of events, her limited role in the loan disbursement, particularly in the case of Videocon Industries, and the process involved in the sanctioning of corporate loans, said a source. 

According to the records, the credit committee of ICICI Bank, in 2012, sanctioned its share of facilities to the Videocon group. Chanda was not the committee's chairperson. 

It was a 12-member committee headed by then chairman K V Kamath. Besides, ICICI Bank gave part (Rs 32.5 billion) of the Rs 400-billion loan approved by a consortium of 20 banks. 

Chanda has clarified that she was only part of the committee without any veto power. Further, she claimed to have attended only eight out of the 30 meetings held for the Videocon group ever since she took over as MD and CEO of the bank. 

According to her, no fresh disbursal was made to the group while the loan moved to consortium-based lending. Kochhar has also apprised Sebi of the current status of outstanding loans to the Videocon group. 

The lender is said to outstanding dues of Rs 28.1 billion from the Videocon group. The group was classified as a non-performing asset (NPA) in 2017. She also mentioned that the business dealings between Videocon Industries and ICICI Bank had existed since 1985. 

Chanda joined the bank in 1984 as a management trainee. Currently, she is on indefinite leave until an independent probe under former Supreme Court judge B N Srikrishna against her is concluded. 

Sebi had set a deadline of August 24 for the bank and her to reply to the show-cause notice over alleged violations of listing disclosure norms. Both Chanda and ICICI Bank have submitted separate replies to Sebi. 

An email sent to ICICI Bank did not elicit any response. 

On May 23, Sebi had issued a show-cause notice based on the preliminary enquiry. Sebi has alleged that there was a potential conflict of interest in the transactions of ICICI Bank with the Videocon group. 

By not disclosing the details of her husband's dealings with Videocon, she had not complied with the provisions of listing agreement. Therefore, adjudication proceedings were initiated by Sebi against ICICI Bank and Chanda.