BELATED ACTION ON CHANDA KOCHAR

The high profile former MD and CEO of ICICI Bank Ltd. Ms.Chanda Kochar and her husband Mr.Deepak Kochar were on 24^th December 2022 remanded to the custody of CBI by a special court in Mumbai in connection with alleged irregularities in loans sanctioned by the Bank to Videocon Group so belatedly.

The Rise

Ms.Kochar joined ICICI, which was an infrastructure lender then, as a management trainee in 1984; she was a favourite of the group chairman Mr.K.V.Kamath.  She rose to play an important part in its transformation into a retail-focussed lender when it turned into a commercial bank early in the 1990s. In the year 2009 she was chosen as successor to Mr.Kamath ahead of seniors; this resulted in the exit of Ms.Shikha Sharma, who was senior to her in ranking in the group.  Ms.Shikha Sharma later on became the MD and CEO of Axis Bank Ltd.

Ms.Chanda Kochar also held various positions – member of India-Russia Business Leaders Forum, President of International Monetary Conference and also deputy chairman of the Indian Banks Association and many more. Ms.Kochar has been a member of the Prime Minister’s Council on Trade and Industry, the Board of Trade and High Level Committee on Financial Infrastructure.  She was co-chair of the World Economic Forum’s Annual Meeting in 2011. She received an honorary doctorate from Carleton University, Canada in 2014 and she was conferred the Padma Bhushan, one of India’s highest civilian honours, in 2011

The Fall

On March 2018, The Indian Express first reported that Videocon group promoter Venugopal Dhoot provided crores of rupees to NuPower Renewables P Ltd., a firm he had set up with Mr.Deepak Kochar immediately after the Videocon Group got Rs.3250 Crore as loan from ICICI Bank in 2012 as quid-pro-quo. A whistle blower alleged that Mr.Deepak Kochar and family members benefited from the dealings. The Videocon Group account was declared NPA in 2017 and similar favourable loan granted to Essar Group was also declared NPA.  The Enforcement Directorate has attached the properties of Ms.Kochar and her husband including their swanky South Mumbai residence.  Several public complains have been sent to the Ministry of Finance to withdraw the esteemed civilian award Padma Bhushan awarded to Ms.Kochar. Her chapter at ICICI Bank ended abruptly in 2018 when the board of directors approved a request from Ms.Kochar to seek early retirement. 

This exposes the hollowness of the system:

1. It is indeed intriguing as to how MD and CEOs of private banks are allowed to continue in their posts for as long as a decade when their counterparts in Public Sector Banks are not allowed more than a 3 – 5 year term.  Moreover, when even those in the clerical cadre are not allowed to function from the same office for a period of 5 years, this long sojourn at the helm of affairs of private banks is one of the major reasons for financial mismanagement that runs into several thousands of crores.  It would not be out of place to mention here that Rana Kapoor, the founder of Yes Bank was its MD & CEO from 2004 till 2019 and his exit was shrouded in controversies.
2. It has taken an unduly long period of six years for the fraud to see the light of the day in 2018 which throws many questions about the role of auditing and inspection departments within the bank and external checks and balances from the Reserve Bank of India.
3. Why has the esteemed civilian award Padma Bhushan to Ms.Chanda Kochar not been taken back till date?  It is indeed demeaning for the award itself that it has not been recalled yet.
4. From the year 2009 to 2018, Ms.Kochar has been issued 94 lakh shares under Employee Stock Options, the present value of which is about Rs.350 crores. Does this not amount to rewarding the accused?

The government corporate nexus is a grand design to siphon off thousands of crores of public deposits by abuse of power.  The beneficiaries of such grandiose often escape with little or no punishment, courtesy powerful people in the government.  It is imperative that the government and the regulatory authorities impose stringent inspection mechanism for banks in the private sector and also handout exemplary punishment to the guilty which would send a strong message. Many of these maladies can be averted by nationalising all the private sector banks.

“Power corrupts and absolute power corrupts absolutely” is so true in the saga of Ms.Chanda Kochar’s rise and fall.