Dinesh Kamath's Editorial 'Chanda Kochhar case' that was published in Newsband

Chanda Kochhar case

The conclusion arrived at after the inquiry by former Supreme Court judge Justice B.N. Srikrishna into the allegations against former ICICI Bank CEO Chanda Kochhar was that she did not conduct herself as she should have in relation to conflict-of-interest issues. The Central Bureau of Investigation filed an FIR against Ms. Kochhar, her husband Deepak Kochhar, head of the Videocon group Venugopal Dhoot and ICICI Bank executives for sanction of credit facilities in violation of rules, that caused a loss of ₹1,730 crore to the bank.

Were the loans given in return for financial favours? If it is so, then it becomes a criminal case. Clearly, Ms. Kochhar erred, and badly at that. Just a day after a ₹300-crore loan was disbursed to Videocon International Electronics in 2009, Mr. Kochhar’s NuPower Renewables received ₹64 crore from the Videocon group. It is impossible to believe the board was not aware of the allegations against the CEO.

The ICICI Bank episode is only one among several instances of governance lapses in corporate India in recent times. This is just one illustration of the mismanagement and gross misuse of banking sector by some vested interests by consistent violation of rules.

In the early stage board was overly indulgent and now overly harsh. She herself should have resigned much earlier without precipitating an inquiry by judge.

Efficiency in the private sector is often overrated and corruption in the private sector is often underrated".

Ms Chanda Kochar’s case underscores the fact that often the sub-committees of Board of Director of a listed public limited company may be ineffective in dealing with irregularities. Independent Directors on Board of a listed public limited company have to be really independent. Question is this: are they really independent? Another question related to investigations in Ms Kochar’s case is this: Would the investigations be really free?

This transaction took place a decade ago, roughly around the time Ms Chanda Kochhar became CEO. The stake acquired by the Dhoots and Kochhar family would convert a dodgy favour into an outright bribe. The intriguing question that arises is whether this was a solitary transaction or part of a larger pattern of misconduct spanning a decade at the helm.

Chanda Kochchar is made accounted for her acts against Corporate Governance norms while UPA government is at helm. What is wrong then, in going after Mayawati or Akhilesh for Power misuse? This is tax payers’ money not shareholders’. It is the time Congress moves beyond Rafale deal and also look at the hands they are shaking for opportunistic gains. It is clear, NDA Government is delivering results.