Why only Chanda Kochhar?

The case of the eminent independent directors on the ILFS board is also similar, but there seems to be no punishment on the cards for them

Mumbai: Among those biggies, who have defrauded and damaged India’s banks and financial institutions (and we are not referring here to rogue borrowers like Nirav Modi, Mehul Chokshi, etc.) the one who has been bearing the maximum brunt of public shaming and punishment, and rightly so, has been Chanda Kochhar, the former ICICI Bank CEO, who was dismissed on charges of corruption, criminal misconduct and violating the code of conduct. She has been under unremitting investigation by CBI, SEBI, ITD and the ED and the process of punishment and maybe conviction has begun. It all caught momentum after the Justice B N Srikrishna panel held her guilty and that made the Bank which was otherwise a passive spectator till then, too her active adversary, compelling it to take appropriate action against her. The ED has recently attached her personal assets and also those of her husband, being confiscation of assets generated out of proceeds of crime, under the money laundering laws. The CBI has filed charges and the ITD is pursuing cases against her.

In the meanwhile ICICI Bank has taken her to court, seeking to recover the huge sums paid to her, by way of bonus, incentives and variable pay, from 2006 to 2018. This is pursuant to an agreement signed by her in December 2016, when she was ruling the roost in her prime, under which she had agreed to return all the bonuses, incentives, etc. paid to her if she was found guilty of any gross negligence or breach of integrity, which she has indeed been. Chanda Kochhar is fighting this case tooth and nail, claiming in the writ petition that the termination of her services by ICICI Bank on 31.1.2019 was illegal and hence, she is not required to pay back these bonuses. The action by other agencies is awaited, but the fact is that such a person who presided over a large institution and was richly decorated and respected, deserves the most harsh punishment for her integrity deficit, which not only caused colossal financial and reputation damage to ICICI Bank, but also resulted in a huge waste of public money, by way of NPAs on account of loans given for bribes, to the Videocon group, and maybe others too.

But strangely, the zeal with which she has been pursued by authorities and agencies and is being punished is not being seen in other such cases that are being investigated by these agencies/authorities. Take the case of Rana Kapoor, the tainted founder of Yes Bank. He too indulged in rampant malpractices, when he was its CEO, which includes reckless lending and giant NPAs, the falsification of accounts and regulatory failure, which has left the bank with a rotten reputation and eroded finances. So pathetic is the state of Yes Bank when he left, that the new CEO Ranveet Gill has been struggling since a year to rope in new investors, with zero success so far. Apart from the huge NPA losses suffered by the bank and also by its shareholders, it loss of reputation has made it a basket case. And the author of this giant mess, Rana Kapoor is enjoying his retirement, after having collected a fortune upon the sale of his shareholding in Yes Bank. As compared with the case of Chanda Kochhar, he seems to be enjoying his retirement years very honorably.

Or take the case of the dubious role played by Deloitte in the case of the ILFS group, where it has been found to have knowingly indulged in and has been an accomplice in its manipulation of accounts, falsification of financial statements, to conceal its giant frauds and losses and show a rosy picture, for which it was paid a sum of about Rs.20 crores per year, under the garb of professional fees. To us, the crime of Deloitte in the case of the ILFS scam was far greater than that of Chanda Kochhar in the case of ICICI Bank, but the investigation/punishment being meted out to Deloitte indicates a kid glove-soft treatment. At the least Deloitte must be compelled to pay back this huge sum that it took from ILFS for a decade, to dubiously ‘manage’ its fraudulent state of affairs. The case of the eminent independent directors on the ILFS board is also similar, but there seems to be no punishment on the cards for them. A similar situation is emerging in the case of the scammy Wadhwans, the defacto owner/promoters of the PMC Bank.

It is interesting to note that all these delinquents, whether it be Chanda Kochhar, Rana Kapoor, Deloitte, etc. have indulged in similar malpractices, though in varying degrees, only Chanda Kochhar seems to have been singled out for punishment. It perhaps reflects their individual ability to game the system, even after their crimes stand exposed. It is also for this reason that only a few top bankers of PSBs have faced prosecution and punishment and that explains why the woes of the banking system will continue.