The report concluded that she failed to discharge her fiduciary functions to rescue herself to avoid any conflict of interest.
Illustration: Dominic Xavier/Rediff.com
In a major embarrassment for ICICI Bank, an independent enquiry has indicted former CEO Chanda Kochhar for violating various regulations, and the lender has decided to stop all unpaid retirement benefits and also recover bonuses paid to her since 2009.
The leading private sector lender, which had given a clean chit to Kochhar in the Videocon loan matter, will also treat her resignation as 'Termination for Cause'.
The latest development comes days after the CBI filed an FIR naming Kochhar and others in the alleged quid pro quo in extending Rs 3,250-crore loan to Videocon Group.
An independent enquiry panel led by Justice (Retd) B N Srikrishna observed that Kochhar violated bank policies and other rules and regulations.
Based on the findings of the panel, the ICICI Bank board has advised to take "further actions as may be warranted in the matter".
Meanwhile, ICICI Bank CEO Sandeep Bakhshi said in analyst call that the bank has put out a statement about Kochhar, and the lender's role now is limited to cooperating with regulatory agencies.
In March 2018, the board of ICICI Bank had given a clean chit to Kochhar and had said there was no question of favouritism, nepotism or conflict of interest on her part in granting loans to Videocon Industries or any other company.
The board, following the receipt of the enquiry report, on Wednesday decided to treat "the separation of 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".
These, the statement said, include revocation of all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested and unexercised stock options, and medical benefits.
The board has also asked the bank to take steps for "clawback of all bonuses paid from April 2009 until March 2018, and to take such further actions as may be warranted in the matter".
Kochhar became the CEO and managing director of the country's leading private sector lender in May 2009 and left the bank in October 2018.
A high profile banker, Kochhar was bestowed with Padma Bhushan in 2011.
The report found 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 Srikrishna committee report concluded that there was lack of diligence with respect to annual disclosures as required by the bank in terms of its internal policies and violation of Code of Conduct and applicable Indian laws.
There were allegations of involvement of Kochhar and her family members in a loan provided to Videocon group on a quid pro quo basis.
It was alleged that Videocon Group pumped money into NuPower Renewables, a firm owned by Deepak Kochhar, husband of Chanda Kochhar.
The allegation of conflict of interest was levelled by whistle blower Arvind Gupta.
Later, in March, another unnamed whistle-blower complained against the bank and its top management, including Kochhar, alleging a deliberate delay in recognising impairment in 31 loan accounts between 2008 and 2016 to save on provisioning costs.
These allegations led to probes by multiple agencies, including the CBI, ED and SFIO, and also questioning of the Kochhar family members.
From a performance perspective, when she took over ICICI Bank was the second largest in the system and the largest among its private sector peers.
But at the end of her stint at the bank, it was reduced to a distant No 3 in the system and the second largest private sector lender after HDFC Bank by a wide margin.