In line with the expectations of analysts and investors, the ICICI Bank board said on Monday MD and CEO Chanda Kochhar will remain on leave till the independent probe into charges of favouritism announced at the end of May is completed.
However, Kochhar continues to hold the position of MD and CEO of the bank. The board also announced that Sandeep Bakhshi, who has performed the role of MD and CEO of ICICI Prudential Life Insurance since 2010, has been appointed as wholetime director and chief operating officer (COO) of the bank for a period of five years.
In an exchange filing released late on Monday evening, the bank said: “In line with the highest levels of governance and corporate standards, Ms. Chanda Kochhar has decided to go on leave till the completion of the enquiry as announced on May 30, 2018. The Board has noted and accepted this.”
The bank said Bakhshi, who is set to take over as COO with immediate effect (June 19), will “be responsible for handling all the businesses and corporate centre functions at the bank. All executive directors on the board of ICICI Bank and the executive management will report to him”. It added that Bakhshi will report to the board in Kochhar’s absence.
Investors have been clamouring for the bank to distance itself from Kochhar who has been under a cloud over conflict of interest allegations over loans extended to Venugopal Dhoot's Videocon and Dhoot's investment and stake transfer to NuPower, a company floated by Chanda Kochhar's husband, Deepak Kochhar. The Central Bureau of Investigation (CBI) has launched a preliminary enquiry into the matter.
Market regulator Sebi served a notice to Kochhar on May 24, seeking a response on the matter. Days later, the bank’s board said it would be setting up an independent probe into the charges against Kochhar.
On June 1, a financial daily reported that Kochhar was asked to go on “indefinite leave” by the board. However, the bank denied the report hours later, saying she was on “planned annual leave”.
ICICI Bank’s stock gained in trade on Monday on the back of reports that a rejig of the top management was on the cards. It ended the day at Rs 292.5 on the BSE, 3.6% higher than the previous day’s close.