Chanda Kochhar the embattled MD/CEO of ICICI Bank, who is under investigation for serious questionable practices and misconduct, finally put in her papers and resigned as the CEO of the bank yesterday. She also resigned from her directorship in all other subsidiaries of ICICI Bank. There is no element of surprise in this news. With the litany of charges against her that have kept surfacing and are under investigation by various agencies, her position as MD/CEO, had become wholly untenable. The charges against her are grave and shocking and include manipulation of books of accounts to conceal NPAs of over Rs. 10000 crores, nepotism, conflict of interest, misgovernance and an evident quid pro quo in the loan of Rs. 3250 crores given by ICICI Bank to Videocon and its investment of Rs. 64 crores in Nupower Renewables, her husband’s company. The saga of her tenure as CEO of ICICI Bank is not yet over since the various investigations continue against her and if she is found guilty of malpractices and misconduct in those findings, she will be suitably charged/prosecuted.
The entire case of serious charges against her and yet, the ICICI Board giving her unconditional support and a clean chit and the Reserve Bank not taking any action against her, has been a curious one, with many unanswered questions. The tenure of the likes of Shikha Sharma and Rana Kapoor, the CEOs of Axis Bank and Yes Bank respectively, was truncated by the Reserve Bank, primarily on charges of manipulation of accounts and regulatory failures. In their case, the RBI did take a decision at the earliest possible and firmly exercised the power of being the banking regulator of India. They were not under investigation by any other agency/authority, but the RBI yet acted swiftly and decisively. In Chanda Kochhar’s case, however, she is under investigation by the SEBI/ITD/MCA/CBI etc. and yet the Reserve Bank has been indecisive and has soft-pedalled her case. It is important to understand, as to what has been the compulsions of RBI, that she was not asked to go, but was allowed to continue as the ICICI Bank CEO, on her terms.
That brings us to a moot question, why did Chanda Kochhar resign so late in the day and did not do so much earlier? If she had resigned in February 2018 itself, when the first charges of conflict of interest and impropriety were levelled against her, with no other enquiry opened against her by and agency like CBI/SEBI etc., she would have had a much more honourable exit, without spilling out the matters in the open. She could have resigned on specious moral grounds, would have walked out with her head held high and would have managed to salvage her career and reputation. But then she adamantly chose otherwise, despite being aware that she lived in a glass house. It defies common sense and logic. But then Chanda Kochhar’s political links were always very well known. It could be that she dug in her heels on the assurance of powerful political connects, on whose trust too perhaps her financial impropriety was conducted. In the meanwhile, the stock market cheered her exit, with the price of the ICICI Bank share going up by 4%, as few supported her continuance of the ICICI CEO, though on leave.
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