ICICI Bank CEO Chanda Kochhar could face up to Rs25-cr fine if found guilty
11 June 2018
ICICI Bank chief executive Chanda Kochhar could face up to Rs25 crore, or three times the gains she allegedly made illegally or facilitated others to do so, if the Securities and Exchange Board of India (Sebi) finds that she did not abide by fair disclosure norms in its ongoing loan fraud probe.
While the Sebi rules prescribe a maximum penalty of Rs25 crore, or three times the ill-gotten gains, Sebi’s adjudicating officer has the discretion to decide on the quantum of the penalty. Sebi, however, cannot demand her removal from office, according to a Mint report.
“Only a financial penalty can be levied as under the current notice, there is no provision for asking the CEO to step down,” the report quoted two executives as speaking on condition of anonymity.
On 24 May, Sebi sent a notice to ICICI Bank and Kochhar, seeking clarification with regard to disclosure of price-sensitive information from the bank and the CEO allegedly not abiding by the bank’s code of conduct.
“The show-cause to Chanda Kochhar alleges that she did not adhere to the bank’s code of conduct as far as making disclosures... Considering that the CEO’s husband (Deepak Kochhar) had a partnership with a firm owned by Venugopal Dhoot, promoter of Videocon group, and some of the group’s companies in turn secured loans from the bank, these disclosures should have been made as part of Sebi’s rules on LODR (Listing Obligations and Disclosure Requirements),” the report quoted one source as saying.
Alternatively, ICICI Bank CEO Chanda Kochhar can also ask for a settlement by paying a fine and without admitting to any wrongdoing in the Videocon loan case, according to the report.
“The bank can always file for consent or a settlement without admitting to any wrongdoing,” this executive said.
The Economic Times on 8 June reported that ICICI Bank is looking to file a consent plea with Sebi.
However, a settlement with Sebi may not guarantee her continuation as ICICI CEO till she completes her current five-year term, which ends in March 2019, as a reconstituted board could still ask her to consider stepping down on moral grounds.