The Securities and Exchange Board of India (Sebi) has given five more days for ICICI Bank and its managing director and chief executive officer Chanda Kochhar to respond to a show-cause notice over alleged violation of listing norms after both the bank and Kochhar failed to replay to the notice within the stipulated 7 June deadline.
Kochhar and the bank have cited lack of documentary proof to support the allegations, although Sebi had provided the lender with relevant documents last week.
“The notice, however, did not have adequate documents to support the allegations. Before filing an appropriate reply, evidence of alleged contravention of securities laws need to be examined by the recipients,” the report quoted a source as saying.
Kochhar and the bank also sought more time to respond to the notice in the absence of, what they said, lack of documentary proof that support the allegations.
Meanwhile, the bank has written to the regulator, requesting it to share documents on the basis of which the notice was served.
Sebi has now asked Kochhar and ICICI Bank to respond to the notice by 10 July.
Sebi had sent a 12-page show-cause notice to ICICI Bank and Kochhar on 23 May in relation to disclosures made while giving loans to Videocon Group.
The regulator in its notice had alleged violations of code of conduct because Kochhar reportedly had not disclosed conflict of interest arising out of alleged business deals between ICICI Bank, Videocon and NuPower Renewables a start-up led by her husband Deepak.
Sebi had, on 17 April, initiated a preliminary inquiry into whether the bank’s board was aware of the conflict of interest and also the stance of the independent directors when the board had approved the loan.
Besides, the regulator sought an explanation on lapses in disclosures of business dealings involving Deepak Kochhar. In its 12-page notice, Sebi had mentioned that Kochhar admitted her husband had many dealings with Videocon Group over the years.
All listed companies and their key managerial staff are required to follow a code of conduct and should comply with all security norms.
The market regulator can pass an ex-parte order against the entity if the aggrieved party did not respond to its notice within the stipulated time.