ICICI Bank voted on Thursday in favour of appointing its MD and CEO Chanda Kochhar to the board of ICICI Securities, barely three months after asking her to go on indefinite leave till a probe into allegations of favouritism and nepotism against her is complete.
An independent probe led by Justice B.N. Srikrishna announced by the bank’s board into allegations of conflict of interest in sanctioning loans to Videocon's Venugopal Dhoot, with whom her husband Deepak Kochhar has business relations, is still on.
Investors and experts have called the bank’s latest decision confusing, as it sends mixed signals regarding Kochhar’s involvement in the company and her ability to perform her duties as director while on indefinite leave. Some say the bank should have abstained from voting. "Obviously they cannot vote against her appointment,” Shriram Subramanian of proxy advisory firm InGovern. “They could have abstained from voting and let the minority shareholders decide. Kochhar shouldn't have put herself forward for appointment in the first place.”
Banking expert Ananth Narayanan is of the view that the bank is taking the safe way out. "If they abstained and she didn’t get appointed to the board, and then the outcome of the probe gives her a clean chit then that doesn’t cut an impressive figure for the company. I think they are just going by the ‘innocent until proven guilty’ assumption.”
ICICI Securities’ shares closed at Rs 327.2 on the BSE on Thursday, down 1.27% from the previous day’s close.