Securities market regulator Securities & Exchange Board of India (SEBI) has issued a notice to ICICI Bank’s MD-CEO Chanda Kochhar in connection with her involvement in the Rs. 3,250 crores Videocon loan case.
ICICI informed BSE and NSE about SEBI’s notice to the bank and Kochhar yesterday, stating that the market regulator has sought details about the CEO’s involvement and alleged violation of regulations in this case.
The bank maintained that there have been no irregularities in this transaction and that it will be filing a reply to SEBI soon. The board of directors of ICICI bank have also repeatedly said that the transaction was transparent and there was no breach of any law.
This case stems from a loan of Rs. 3,250 crores that ICICI Bank had granted to Venugopal Dhoot-led Videocon group in 2012 in return for a favour received by NuPower Renewables. SEBI claims that this transaction involved conflict of interest on the part of CEO Chanda Kochhar because her husband, Deepak Kochhar, holds financial interest in NuPower.
SEBI claims that this transaction violated Listing Obligations & Disclosure Requirements (LODR) Regulations, which mandate that any such transaction involving conflict of interest by related parties must require fulfilment of requisite approval compliances, without which it will be considered illegal.
ICICI has previously justified Kochhar’s involvement in the decision by saying that the loan approved for Videocon was actually granted by a consortium of banks, and that rebuts charges of conflict of interest levelled on her. The company’s senior management had also backed her when investigations began.