India’s ICICI Bank named group veteran Sandeep Bakhshi as its interim head, and said chief executive Chanda Kochhar would go on leave pending the completion of a probe over an alleged conflict of interest that has led to months of controversy for the lender. Bakhshi, who currently heads ICICI’s life insurance arm, will take up a newly created position of chief operating officer at the bank for a five-year term beginning today, pending regulatory approvals, the bank said in a statement late yesterday. Bakhshi will report to the bank’s board during the period of Kochhar’s leave and will be responsible for handling all the businesses and corporate centre functions, ICICI Bank said.
All the executive directors of the bank and its executive management would report to Bakhshi. Kochhar, 56, who has been CEO of ICICI Bank, India’s third-biggest lender by assets, since May 2009, has faced allegations of favouring Videocon Group, a consumer electronics and oil and gas exploration company, in the bank’s lending practices. Videocon’s founders had an investment in a renewable energy company founded by Kochhar’s husband.
ICICI Bank’s board, which had initially backed Kochhar calling the alleged nepotism charges against her “malicious and unfounded”, last month said it would institute a probe headed by an independent person into allegations raised by an anonymous whistleblower. “In line with the highest levels of governance and corporate standards, Chanda Kochhar has decided to go on leave till the completion of the enquiry,” the bank said. The bank has yet to provide any details of the probe.
Local media has reported BN Srikrishna, a retired judge of India’s Supreme Court, will lead the probe. Bakhshi started his career with the ICICI group in 1986 and has looked after the group’s corporate, retail lending and insurance businesses. He has headed ICICI Prudential Life Insurance Co Ltd since 2010 and helped take the company public in 2016. “Bakhshi is part of the ICICI culture. So, from that perspective, he is the right choice as the senior-most person within the ICICI umbrella after Kochhar,” said Shriram Subramanian, founder of proxy advisory firm InGovern.
“That should be taken favourably by investors,” Subramanian said, although he criticised the bank’s board for not having acted more decisively in tackling the controversy. The bank’s New York-listed shares rose 3.6% by 1647 GMT on the news. Its Mumbai-listed shares had closed 3.7% higher before the announcement. Chanda Kochhar has not commented on the issue. Her husband Deepak Kochhar has denied any wrongdoing, as has the head of the Videocon group. NS Kannan, currently an executive director at ICICI Bank, is set to be the new CEO of ICICI Prudential Life, the bank said.
Sources and photo-credits: Reuters, Gulf Times