Videocon loan case: Full faith in Chanda Kochhar, says ICICI board

Mumbai, Mar 29: The board of ICICI Bank has said that it reposes “full faith” in its MD and CEO Chanda Kochhar, and that there is no question or scope of any favouritism, nepotism or quid pro quo in the lender’s loans to Videocon Industries.
The bank’s board reviewed the internal processes of the lender and also the details of the exposure to the Videocon group following allegations in some non-mainstream websites that Kochhar’s spouse — Deepak Kochhar — received investment in his company from Videocon as quid pro quo for loans from ICICI Bank.
A statement by the lender said that the board reviewed the credit process in light of “malicious and unfounded rumours in the past few days casting insinuations on ICICI Bank and its MD & CEO”. The bank has also clarified that none of the investors of NuPower Renewables (the firm founded and headed by Deepak Kochhar) is a borrower of ICICI Bank.
While giving details of its loans to Videocon for the first time, the board also said that in 2012 a consortium of 20 banks and financial institutions had sanctioned a debt consolidation programme for the group, and for its oil & gas capital expenditure plan amounting to about Rs 40,000 crore. ICICI Bank had sanctioned its share of around Rs 3,250 crore, which was less than 10 per cent of the consortium’s total facility in April 2012.
The board observed that major exposures are approved by the credit committee of the board. The majority of credit committee members are independent directors of the lender. The chairman of the credit committee, till as late as June 2015, was always a non-executive director. “Based on this, it can be concluded that there are adequate checks and balances in loan appraisal, rating and approval processes within the bank, both from the control as well as from a governance perspective,” the statement said.
According to the board, no individual employee — whatever may be his or her position — has the ability to influence the credit decision at ICICI Bank.