ICICI Bank imbroglio

The latest decision to rearrange the chairs in the top executive echelons of ICICI Bank seems to indicate that an individual has taken precdence over the larger issue of propriety and accountability. Even though the Bank Managing Director & CEO Chanda Kochhar is in the eye of the storm over conflict of interest involving her husband and brother-in-law, she seems to have remained unscathed. For some reason, the board has been obliged to keep her corner office unoccupied, pending an independent inquiry against her family’s alleged quid pro quo with Videocon Group promoter Venugopal Dhoot. The ICICI board’s undue zeal in shielding CEO Kochhar contrasts with the larger goal of securing shareholders’ interests right from the time a whistleblower blew the lid off the alleged scandal. The board initially denied any wrongdoing and gave her a clean chit. Later, under pressure from regulating agencies, it reluctantly agreed to set up an independent inquiry.  

The board’s recent decision to appoint Sandeep Bakshi as the wholetime director and Chief Operating Officer is nothing but eyewash. The board’s latest stand makes it amply clear that Bakshi,  subordinate to Kochhar in the ICICI heirarchy, will eventually remain answerable to her. Only during her period of leave will he report to the board, which seems to have made up its mind about Kochhar’s innocence. 

The board’s statement also appears to be a travesty of justice. It emphatically says that Bakshi “will report to” Kochhar, “who will continue in her role as MD & CEO” of the bank. It did not miss even this opportunity to praise the controversial CEO by attributing her decision to go on leave according to “the highest levels of governance and corporate standards”.  It, however, fails to note Kochhar’s initial defiance for more than three months. Under such circumstances, an independent and fair investigation may well be illusive. The board does come off as over protective but probity demands that Kochhar should voluntarily step aside. If she comes clean in the probe, she could always be reappointed to the top position.