Government Keeps An Arms Length From ICICI Bank-Videocon Loan Controversy

The government continues to distance itself from the controversy surrounding loans given by ICICI Bank Ltd. to the Videocon Group and allegations of nepotism against the bank’s chief executive officer Chanda Kochhar.

Lok Ranjan, the government’s nominee on the board of ICICI Bank, skipped the lender’s board meet for the second consecutive day on Tuesday, according to two government officials familiar with the matter who spoke on the condition of anonymity. The board met on Monday to approve financial results for the quarter ended March 2018. It met again on Tuesday to discuss the bank’s future strategy.

Allegations of conflict of interest surfaced a few months ago when Indian Express highlighted dealings between the Videocon Group and Deepak Kochhar-promoted NuPower Renewables. Deepak Kochhar is Chanda Kochhar’s husband.

The board came out in support of Chanda Kochhar but the government has refrained from taking a position on the matter so far. This, said one of the officials quoted above, is the reason that the government nominee did not attend the board meet.

The government believes that attending the board meeting would be endorsing the board's view on letting Chanda Kochhar continue as the head of ICICI Bank, said this official. The official added that the government would take an informed view on the ICICI Bank-Videocon matter based on the Reserve Bank of India's views and findings of investigative agencies.

The government has a seat on ICICI Bank’s board because it had guaranteed foreign currency borrowings by the institution when it was a development finance institution. The government will give up its board seat when these borrowings mature in 2022, explained a government official. Apart from the government, LIC, too, has a representative on ICICI Bank’s board.

The funding trail of NuPower Renewables is currently being investigated by the Central Bureau of Investigation. The Reserve Bank of India had looked into the matter in 2016 and had found no obvious instances of conflict of interest in loan approvals but had sought further investigation into the funding of NuPower, PTI reported on April 15.

The board of ICICI Bank has continued to support Chanda Kochhar. On Monday, during a press conference after the announcement of the bank’s earnings, Kochhar was repeatedly asked about conflict of interest concerns. She stuck to script saying that the board had made its position clear.

“The board has already stated its stance on the matter and we have nothing to add to this. Bank has supported all investigative authorities and co-operated with them in the past. ICICI Bank will continue to do so,” Kochhar said.