A little over three months after Chanda Kochhar resigned as the MD and CEO of ICICI Bank, a probe led by Justice B.N. Srikrishna has found that she violated the bank’s code of conduct in disbursal of loans to Venugopal Dhoot's Videocon Group.

The findings of the probe into the alleged quid pro quo in loans disbursed by ICICI Bank to the Videocon Group have resulted in the bank treating Kochhar’s resignation as a termination of her service.

The independent probe, which was set up by the bank’s board in the end of May 2018, culminated on Wednesday with the report being submitted to the board.

In a press release, the bank said the probe concluded that “Chanda Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.”

The bank has said it will be revoking all her existing and future entitlements such as any unpaid amounts, unpaid bonuses or increments, unvested and vested unexercised stock options, and medical benefits. The statement went on to say that a clawback of all bonuses paid to Kochhar from April 2009 until March 2018 will also be pursued.

In a statement, Kochhar, said, “I am utterly disappointed, hurt and shocked by the decision. I have not been given a copy of the report. I reiterate that none of the credit decisions at the bank are unilateral.”

“I have served ICICI for the last 34 years with all my dedication and hard work. I have never shied away from taking tough decisions whenever required to be taken in the best interest of the organization. This decision from the Bank has caused me immense hurt and pain.”

Last year Kochhar found herself under a cloud of suspicion after a whistleblower levelled allegations of corruption and nepotism with respect to loans extended to Venugopal Dhoot's Videocon and Dhoot's investment and stake transfer in NuPower, a company floated by Chanda Kochhar's husband, Deepak Kochhar.

The Central Bureau of Investigation (CBI), which had launched an enquiry into the matter last year, filed a first information report (FIR) against Kochhar, her husband and Venugopal Dhoot, the chairman of Videocon Group around a week ago. The companies Supreme Energy, Videocon International Electronics and Videocon Industries were also named in the FIR.

Experts are now questioning the board's initial defence of Kochhar when the allegations emerged early last year. JN Gupta, former ED, SEBI and co-founder and MD of proxy advisory firm SES told CNBC-TV18 shortly after the news broke, “I think it is a massive blow. But it raises a big question, which is what about the board of ICICI Bank?”

He went on to say that the board was perhaps wrong in backing Kochhar immediately after the allegations came to light and should have set up a probe much earlier. “What was the board doing? Did they give her the clean chit in a hurry or were they part of the whole process?” Gupta asked.

Meanwhile, Shriram Subramanian, MD, InGovern said the relationship between a “star CEO” and the board of a company must be examined closely going forward.

Here is Kochhar’s complete statement:

"I am utterly disappointed, hurt and shocked by the decision. I have not been given a copy of the report. I reiterate that none of the credit decisions at the bank are unilateral. ICICI is an institution with established robust processes and systems which involve committee based collective decision making with several professionals of high caliber participating in the decision making. Hence the organization design and structure obviate the possibility of conflict of interest.

I have served ICICI for the last 34 years with all my dedication and hard work. I have never shied away from taking tough decisions whenever required to be taken in the best interest of the organization. This decision from the Bank has caused me immense hurt and pain.

I have pursued my career as an independent professional with utmost honesty, dignity and integrity. I continue to have faith and belief in my conduct as a professional and I am certain that truth will ultimately prevail."

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