Chanda Kochhar violated the ICICI's code of conduct and internal policies, the bank today said, quoting an inquiry report on allegations of loan irregularities against its former chief. The bank said it would treat Chanda Kochhar's exit as "termination for cause".
Chanda Kochhar, 56, had quit as CEO and managing director of the bank in October over allegations that she favoured Videocon Group, a consumer electronics and oil and gas exploration company, in the bank's lending practices. Her termination means her increments, bonuses, medical benefits and stock options, have been cancelled. She has to return bonuses paid from April 2009 to March 2018, ICICI bank said in its statement.
According to ICICI, the inquiry report 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 report also noted her "lack of diligence" with respect to the bank's internal policies, code of conduct and in avoiding conflict of interest. "The bank's processes were rendered ineffective by her approach...," said the inquiry.
Ms Kochhar, in a statement issued hours later, said she was "utterly disappointed, hurt and shocked."
It is a stunning fall from grace for Chanda Kochhar, once one of India's most celebrated bankers and widely acknowledged for her role in shaping retail banking in India.
Ms Kochhar has been accused of criminal conspiracy and cheating by the CBI for alleged irregularities in a loan of Rs. 3,250 crore in 2012 to the Videocon Group, a legacy firm which has become a non-performing asset for the ICICI Bank.
A whistleblower alleged that Ms Kochhar's husband Deepak Kochhar and her family members benefited from the dealings.
Videocon's Venugopal Dhoot allegedly invested crores of rupees in NuPower Renewables, a company founded by Ms Kochhar's husband, months after the Videocon group was granted loan by the bank. The loan was cleared by a committee of which Ms Kochhar was a member, alleges the CBI. The agency says she abused her official position and "got illegal gratification / undue benefit through her husband from Dhoot for sanctioning Rs 300 cr to Videocon."
It was part of a Rs 40,000 crore loan which Videocon got from a consortium of 20 banks led by the State Bank of India.
As allegations tumbled out, Ms Kochhar quit her post seeking premature retirement on October 4.
After initially backing Ms Kochhar, ICICI Bank set up a "comprehensive enquiry" to investigate the charges. As more allegations surfaced, a multi-agency probe was launched.
Ms Kochhar joined the ICICI bank in 1984 as a management trainee. She rose to the top and was appointed Managing Director and CEO in 2009.