case of chanda kochhar

1. THE FALL OF A STAR BANKER
Chanda Kochhar the beleaguered former MD and chief executive officer of ICICI Bank
and widely recognised for her role in shaping retail banking in India. Chanda was born
on 17th November, 1961 in Jodhpur in Rajasthan. She was brought up in Jaipur,
Rajasthan. She was graduated from Jai Hind College in Mumbai(1982) and she had done
master’s degree in Management from Jamnalal Bajaj Institute of Management Studies.
She excelled in her Management studies and was awarded the Wockhardt Gold Medal and
also J. N. Bose award for her excellent performance in Cost Accountancy.
PROFESSIONAL CAREER
1984- Trainee management in ICICI
1994 - Chanda become the Assistant General Manager
1996 - She became the Deputy General Manager
1999- Promoted as the General Manager and was honoured with the responsibility of
managing more than top 200 reputed clients of the company.
2000 was the turning point of Kochhar’s career as she was shifted from corporate banking
to retail banking division.
2001-Kochhar was made Executive Director
2006- She was promoted to Deputy Managing Director
2007-She was appointed as CFO and Joint Managing Director.
May 2009 Chanda Kochhar was given the recognition to be the Chief Operation Officer
and the Managing Director for five years by the ICICI bank.
HELM OF AFFAIRS
Kochhar built her banking mettle under ICICI chairman Narayanan Vaghul and later K V
Kamath.
The year 2000 was the turning point of Kochhar’s career. She had successfully set up the
corporate banking division for ICICI Ltd., and was now asked by KV Kamath (then CEO
and MD of ICICI) asked Kochhar to shift gears from corporate banking to retail banking
besides the fact that the consumer credit industry was very small in India, Kochhar did not
have relevant retail banking experience to lead this division but this did not stop kochhar
to proceed. There was financial crisis in 2008 which made ICICI Bank’s profit decline by
more than 1,000 Crores than Kochhar came with new strategy — called “4C” strategy

2. and ICICI reported a 30% jump in profit for 2011-2012Q1. In May 2009, Kochhar became
the head of ICICI Bank and was the first woman and the youngest CEO to head ICICI
Bank. It was she who had the courage to keep working hours of the bank be 12 hours
whereas rest of all brands worked for 7 hours in a day.
Under her guidance, ICICI spread their operations to 15,600 villages and opened accounts for
more than 18.5 million people and even set up 3,000 ATMs in rural areas.
In 2015–16 she was the president of the International Monetary Conference.
She was the deputy chairman of the Indian Banks Association and chairperson of the board
of governors at IIT Vadodara. She was also on the boards of the National Institute of
Securities Markets and Institute of International Finance and member of the Prime
Minister's Council on Trade & Industry, the Board of Trade and High-Level Committee on
Financing Infrastructure.
Achievements –
 Retail Banker of the Year honour by the Asian Banker in the year 2004.
 Business Woman of the Year recognition by the Economic Times in the year
2005.
 Rising Star Award by the Retail Banker International in 2006.
 She was featured in the list of “30 Most Powerful Woman Leaders” in business for
eight years continuously.
 Transformational Business Leader of the Year by the All India Management
Association in the year 2010.
 Chanda Kochhar was ranked the 10th in position in the list by Fortune magazine
of “ Most Powerful Women in Business” during 2010.
 Achieved 92nd rank in Forbes list of “Most Powerful Woman” for 2010.
 The CNBC TV 18 awarded her in the year 2010 as the “Outstanding
Woman Business Leader of the Year”.
 Her name got the rank to be the 11th in the Financial Times list for the
“Top 50 Woman in World Business
 She was awarded the Padma Vibhushan in the year 2011.

3. CONTROVERSY
On October 2016 the issue of alleged irregularities in loans comes into the light, after a
shareholder whistle-blower Arvind Gupta, an investor in both ICICI Bank and Videocon Group,
raised concerns through a blog.
Gupta alleged that Chanda Kochhar influenced an Rs3,250-crore loan to the Venugopal Dhoot-led
Videocon group in 2012 in return for a deal in NuPower Renewables and Supreme Energy, a clean-
energy firm run by her husband Deepak Kochhar.
ICICI Bank CEO Chanda Kochhar and other members of her family had invested in a previously
unheard of firm called Credential Finance Ltd at a time when Venugopal Dhoot's Videocon
International Ltd had held a 17.74 per cent stake in it.
Total of seven members of the Kochhar family together held a 2 per stake in Credential Finance,
that was filed with the Registrar of Companies (RoC) in 2007.
Chanda sold or transferred her shares in the company soon after being promoted to CEO in 2009.
However, the other six Kochhar’s continued to hold their shares at least until 2013-14.
Chronological order the case proceed
January 30,2018 a panel headed by Justice BN Srikrishna for the Videocon loan case found that
former ICICI Bank MD and CEO Chanda Kochhar violated the Code of Conduct. In response to
the development, the bank's board said it will treat her separation as 'termination for cause'.
March 2018: The case again comes in spotlight when another unnamed whistle-blower complains
against the bank and its top management, including Kochhar, alleging a deliberate delay in
recognising impairment in 31 loan accounts between 2008 and 2016 to save on provisioning costs.
These allegations lead to probes by multiple agencies, including the CBI, ED and SFIO, and also
questioning of Kochhar family members.
March 28, 2018: The bank states that it has reviewed internal processes for credit approval and
'found them to be robust'. The statement points out that the decision to lend the Videocon Group
was taken at the consortium level. Even though Kochhar was part of the lending committee that

4. approved the loan, she did not have any personal stake in it.The bank's board also expresses full
faith in Kochhar, denying any wrongdoing on her part and ruling out any 'conflict of interest'.
March 31, 2018: The Central Bureau of Investigation (CBI) files an initial inquiry. The
investigative agency later also questions Deepak Kochhar and his brother Rajiv Kochhar.
April 3, 2018: the defence of its CEO Chanda Kochhar, then ICICI Bank Chairman M K Sharma
says the board has full confidence in her and rules out any quid pro quo as alleged with regard to
the loan given to Videocon group.The board has come to the conclusion that there is no question
of any quid pro quo/nepotism/conflict of interest as is being alleged in various rumours.
April 4, 2018: The Serious Fraud Investigation Office (SFIO) seeks the Ministry of Corporate
Affairs' nod to probe ICICI Bank's Rs 3,250 crore loan to the Videocon group in 2012.
May23, 2018: The Securities and Exchange Board of India (SEBI) serves a notice to ICICI Bank's
CEO and MD Chanda Kochhar on dealings of the lender with Videocon Group and NuPower
Renewables, an entity promoted by her spouse Deepak Kochhar.
The market regulator asks Kochhar and the bank to submit their responses till June 7 in relation to
a 12-page show cause notice it served to ICICI Bank and Kochhar on May 23.
May 30, 2018: The ICICI Bank board starts an independent probe.
June 2018: The bank appoints retired Supreme Court judge Justice BN Srikrishna to head the
independent panel initiated by ICICI Bank’s board.
June 8, 2018: ICICI Bank and Chanda Kochhar seek more time to respond to the show cause
notice served by markets regulator SEBI.
July 5, 2018: SEBI asks Kochhar to reply to the show cause notice over alleged violation 0f listing
disclosure norms by July 10. Kochhar and the bank had missed the June 7 deadline and
sought more time to respond to the notice due to lack of documentary proof that support the
allegations.
October 4, 2018: The ICICI Bank board accepts Chanda Kochhar's request to seek early
retirement. The bank says that the enquiry instituted by the board will remain unaffected and
certain benefits will be subject to the outcome of the enquiry.

5. January 24, 2019: The CBI registers an FIR against Chanda Kochhar, her husband Deepak
Kochhar and Videocon group MD Venugopal Dhoot over alleged irregularities in loans
sanctioned by the bank to the group in 2012. Chanda, her husband Deepak, and industrialist
Venugopal Dhoot were named in a CBI FIR for cheating and defrauding ICICI Bank to the
tune of Rs 3,250 crore. CBI detailed the modus operandi and charged them with offences
punishable under Section 120B (conspiracy) and 420 (cheating) of IPC, section 7 (taking
gratification) and 13(2) (criminal misconduct) read with 13(1)(d) (pecuniary advantage) of
the Prevention of Corruption Act.
January 30, 2019: A panel headed by Justice BN Srikrishna founds that Kochhar violated the
bank’s code of conduct the Videocon loan case. Following the report, the bank's board says it will
treat her separation as 'termination for cause' under their internal policies.
Allegations
Conflict of interest
Code of conduct
Ethics
Money laundering
Is there a conflict of interest?
 The following sub section {4} stipulates that a director shall avoid conflict of interest. This
means that he should not be involved in a situation in which he may have a direct or indirect
interest which conflicts, or possibly may conflict, with the interest of the company. As a
corollary this means that where there is conflict of interest, there are probabilities that the
interest of the director may prevail over that of the company which may be detrimental to
the company.
 The provision of the sub section {5} takes forward, logically, the duties encapsulated in
the earlier sub sections. In addition to the fiduciary duty of a director not to have any
conflict of interest with that of the company, he shall also not achieve or attempt to achieve
any undue gain or advantage either to himself or to his relatives, partners, or associates.

6.  The question of conflict of interest comes as the transfer of the company to Deepak
Kochhar happened six months after the Videocon got the lead of Rs 3,250 crore from ICICI
bank with 86% of that loan is still unpaid and in 2017, the Videocon account was declared
a non-performing asset.
Code of Conduct

8. According to an anonymous whistle blower Kochhar allegedly favoured Videocon Group in
lending practices. ICICI Bank said it has decided to institute an independent enquiry into the
allegations. He allegedly transferred proprietorship of the company to a trust owned by Deepak
Kochhar for Rs 9 lakh, six months after he received the loan from ICICI Bank. The Videocon
account was declared an NPA(Non-performing Assets) or a bad loan in 2017 according to the
report. The Income Tax department is also probing the acquisition of the current family
residence of Chanda Kochhar, the CEO and MD of ICICI Bank, in South Mumbai by her
husband Deepak Kochhar in a complex transaction involving firms linked to Videocon Group.
The bank said it would treat her resignation as a dismissal due to serious lapses in her conduct by
an enquiry panel led by retired judge BN Srikrishna and would ask her pay back close to Rs 9.8
crore of bonues given to her between 2009 and 2018 and also block his Esops worth over Rs 340
crore as penal punishments.
After initial denials, now it has been established by an independent probe that ICICI Bank's
ex-CEO Chanda Kochhar had indeed violated the company code of conduct. A committee
headed by retired Justice B.N. Srikrishna committee has indicted Kochhar. The indictment
comes less than a week after the Central Bureau of Investigation (CBI) turned its preliminary
enquiry, in which it was probing the alleged nexus between Deepak Kochhar, husband of
ICICI Bank ex-CEO Chanda Kochhar and Videocon group MD Venugopal Dhoot, into an
FIR.
The CBI has booked the three of them in connection with alleged cheating and irregularities
in loans sanctioned by the bank to the Videocon group in 2012.
The Justice Srikrishna committee dwelled on whether Kochhar violated the code of conduct
by not recusing herself in case of the Videocon loan and whether she made required
disclosures related to her husband's and brother-in-law's businesses.

9. MK Sharma, then ICICI Bank chairman, said that the board did not see any conflict of interest
since the Videocon group was not an investor in Kochhar's husband's company and, therefore,
there was no need for Kochhar to recuse herself from the committee that sanctioned the loan to
Videocon. He said the committee had many independent directors and was not chaired by her. He
also said that the loan disbursed to Videocon was part of a consortium arrangement where terms
and conditions had already been agreed upon by the lender group. Sharma said Chanda Kochhar
had also made all the necessary disclosures.
However, when the issue did not die down, the bank agreed to institute an independent probe
by Justice Srikrishna who has now found that Kochhar indeed violated the code of conduct,
by not recusing herself from the committee that sanctioned loan to Videocon and not making
necessary disclosures required under the company code.
The similar transactions and favourable loans granted by Kochhar allegedly to Essar group
which was also later classified as NPAs. Chandra Kochhar subsequently quit ICICI bank
following these allegations and is currently being investigated.
Following CBI action, the Enforcement Directorate lodged a case of money laundering
against Chanda Kochhar in connection with loans disbursed by bank to the Videocon Group
which later turned into NPAs. There are several public complaints sent to Union Finance
Minister suggesting to withdraw highest civilian awards such as Padma Shri and Padma
Bhushan awarded to Chanda by the Union Government of India.
The brother-in-law angle and The Avista angle
It also came to light that ICICI Bank borrowers, including Jaiprakash Associates and
Jaiprakash Power, had hired services allegedly of a firm, Avista Advisory Group, run by
Chanda Kochhar's brother-in-law Rajiv Kochhar (brother of Deepak Kochhar).
Among the companies that are said to have hired services of Avista for the restructuring of
debt were Videocon, GTL Infrastructure and SuzlonNSE -6.33 %. ICICI Bank was a lender to
all these entities. However, the bank denied that it had ever engaged Avista Advisory Group
for any services. Earlier, the bank said that the brother of a husband did not fall within the
definition of a “relative” under the Companies Act and, therefore, there was no requirement
for making any disclosure of such a relationship.

10. The property angle
Chanda Kochhar's house too has come under the lens. The Income Tax department has probed
the acquisition of the current family residence of Kochhar in South Mumbai by her husband
Deepak Kochhar in a complex transaction involving firms linked to Videocon Group. The
house was bought through Credential Finance Ltd, a financial services firm set up by Deepak
Kochhar and his brother Rajiv Kochhar in the mid-1990s. The company had intricate relations
with the Videocon group.
Sale of ICICI bank building
The Income Tax department also probed a 2010 real estate transaction between ICICI Bank
and Videocon Group as part of its investigation into possible tax evasion in the ICICI Bank-
Videocon loan case. The sale of a 13 -storey building, Radhika Apartments, which was earlier
the staff quarters of ICICI Bank, in Prabhadevi in centtral Mumbai, to Videocon Industries
came under the scanner following allegations of possible quid pro quo. It was allegedly sold
to Dhoot’s firm at a much lower price than the existing market rate at that time.
Inflated profits
A whistle-blower complaint accused Kochhar of irregularities in 31 loan accounts. It was
alleged that ICICI Bank inflated profits by at least $1.3 billion over eight years by delaying
provisioning for 31 non-performing assets (NPA) accounts. The whistle-blower alleged that the
bank delayed provisioning for NPAs from loans worth at least $3 billion. The whistle-blower
claimed that the bank would have reported losses in some quarters over the eight years, had the
bank’s management not deferred impairment of loans.
Kochhar impact on ICICI
Kochhar is credited for consolidating the operations of the bank after the departure of K V
Kamath. The bank, with roots in development finance, has also seen a massive rise in its sour
assets, courtesy mainly on exposure to the infrastructure sector, along with its peers, which led
to a massive drop in profit in recent quarters.

11. Selling off stakes in group companies — it listed the life general insurance arms as well as
brokerage businesses in quick succession — gave it the wherewithal to withstand the high
provisioning required recently.
Downfall
Jan 24, 2019 15:26 (IST)
The CBI had searched Videocon headquarters in Mumbai and Aurangabad in
Maharashtra on Thursday.
Jan 24, 2019 15:09 (IST)
Just In: CBI has filed a case against Chand Kochhar
Jan 24, 2019 14:09 (IST)
ICICI Bank shares fell as much as 1.5 per cent to hit an intraday low of Rs.366.20 apiece on
the NSE on Thursday. Shares in Videocon Industries, on the other hand, jumped about 3.5
per cent to Rs. 3.00 during the session.
At 2:00 pm, ICICI Bank shares traded 0.3 per cent lower while Videocon Industries was up 1.7
per cent.
Jan 24, 2019 12:45 (IST)
The raids comes in the wake of a preliminary enquiry the agency registered on March 31,
2018 against Deepak Kochhar, Videocon group officials and others to determine whether any
wrongdoing was involved in the sanctioning of the loan by the ICICI Bank as part of a
consortium, a senior CBI official said.
Jan 24, 2019 12:15 (IST)
The investigating agency conducted raids at four places. While the Videocon offices were
raided in Mumbai and Aurangabad, the searches were also conducted at NuPower offices in
BKC and Nariman Point.
Jan 24, 2019 12:11 (IST)
Chanda Kochhar quit as CEO and managing director of the ICICI Bank in October after
allegations surfaced that her husband Deepak Kochhar and her family members benefited
from a loan of Rs. 3,250 crore to the Videocon Group in 2012.

12. Jan 24, 2019 12:04 (IST)
The investigating agency is searching the Videocon headquarters in Mumbai and
other cities in Maharashtra.
Jan 24, 2019 12:04 (IST)
The CBI has filed a case against former ICICI bank chief Chanda Kochhar's husband Deepak
Kocchar and Videocon head Venugopal Dhoot in a case linked to alleged conflict of interest
in the sanctioning of loan.
The fall of a star banker: Why Chanda Kochhar quit
Kochhar has now sought an early retirement and the bank has accepted her
resignation.

13. NEW DELHI: In 1984, Chanda Kochhar joined ICICI as a management trainee and 25
years later became the MD & CEO. Almost a decade after her ascension to the top, she has
tumbled down under the weight of serious allegations of misconduct and corruption and a
CBI inquiry that followed.
Kochhar has now sought an early retirement and the bank has accepted her resignation. At the
centre of the storm is Kochhar's husband Deepak Kochhar, whose company NuPower
Renewables allegedly received an investment from a VideoconNSE -4.08 % group company
as a quid pro quo for a loan from the bank.
What was the Videocon deal?
ICICI Bank had granted a Rs 3,250 crore loan to Videocon Industries in 2012. The Videocon loan
later turned a non-performing asset. Gupta alleged that loan was given due to business relations
between Kochhar's husband Deepak Kochhar and the Videocon Group.
Kochhar-Dhoot linkage
Whistle-blower Gupta alleged that a company owned by Videocon chairman Dhoot loaned Rs
64 crore in March 2010 to NuPower Renewables that he and Deepak Kochhar had jointly
promoted just two year ago. A complex web of deals resresulted in a trust controlled by Deepak
Kochhar acquiring the lending company six months after the Videocon Group got the loan
from ICICI Bank. Sources in the CBI told NDTV that there was suspicion that the officer was
delaying the case and an investigation was launched against him on January 22, a day before
the case against the Kochhars was filed.
Immediately after registration of the case, searches were to be conducted. There was however
suspicion, that information about the searches were being leaked. The searches were finally
conducted under the supervision of another officer, Mohit Gupta.
The Kochhars and Venugopal Dhoot allegedly obtained a loan for the Videocon Group
through massive irregularities and channelled part of it into a firm founded by Deepak
Kochhar, suggesting a quid pro quo. Mr Dhoot invested crores in Mr Kochhar's NuPower
Renewables, the agency said.

14. Ms Kochhar - who was part of the team that decided to grant the Rs. 3,250 crore loan -- quit
in October as the Chief Executive Officer and Managing Director of ICICI Bank after
allegations that her family benefitted from the deal.
"These loans were sanctioned in violation of Credit Policy of the bank during the relevant
period. These loans amounting to Rs. 1575 crores were sanctioned on various dates by various
committees having senior officials of ICICI Bank as members namely Sh. Sandeep Bakhshi,
Sh. K Ramkumar, Sh. Sonjoy Chatterjee, Sh. N S Kannan, Ms. Zarin Daruwala, Sh. Rajib
Sabharwal, Sh. KV Kamath and Sh. Homi Khusrokhan," the FIR reads.
K Ramkumar was the executive director at ICICI and took voluntary retirement in 2016; he is
currently Founder and CEO of Leadership Centre. Sonjoy Chatterjee is CEO of Goldman Sachs
India; NS Kannan is the Managing Director and CEO of ICICI Prudential; Zarin Daruwala is CEO
of Standard Chartered Bank in India; Rajiv Sabharwal had left ICICI in 2017 and is currently CEO
of Tata Capital; and Homi Khusrokhan, former Managing Director of Tata Chemicals is currently
a board member of ICICI Bank.

15. Abstract:
In the male-dominated world of Indian financial institutions, are women at the helm still a
rarity? At the dawn of the new millennium, India celebrates the remarkable progress of
women in business. Women made great strides in boardrooms and courtrooms, on screen
and in society and are regularly featured on the cover pages of business magazines. Indian
women today attack the so-called glass ceiling to emerge to the top of the corporate ladder.
No other institution is epochal to this trend than ICICI bank. The leading private sector bank
of the country is never bereft of women in senior management. Though the legendary CEO,
K.V. Kamath groomed the next generation leaders like Kochhar who made news as his
successor.
In the backdrop of the changing role of women in the Indian corporate sector, this case study
presents Kochhar’s new role as the managing director and CEO of ICICI Bank. Highlighting
Kochhar’s invaluable contributions to the evolution and growth of the company, the case study
However, on 4th October 2018 she stepped down from her position following allegations of
corruption. Amidst investigations related to Videocon bad loans, she was forced by the board
of ICICI Bank to take indefinite leave.
The Central Bureau of Investigation named Chanda Kochhar and her husband as beneficiaries
in the financial fraud. The Justice B N Shrikrishna probe panel reported that Kochhar had
violated ICICI Bank's Code of Conduct, which led to termination of her services with all her
entitlements and benefits revoked. After her exit, Sandeep Bakhshi, who was the interim
Managing Director and CEO became the full time MD and CEO.
Pedagogical Objectives:
• To analyse the capabilities of women in donning various roles across the Indian
corporate sector

16. • To discuss Chanda Kochhar’s innovations and credentials at ICICI Bank that
helped her rise to the top
• To critically examine the succession planning at ICICI Bank and choice of
Chanda Kochhar as the right successor of K.V. Kamath
• Debate on the timing of Chanda Kochhar taking charge as the new CEO amid
ongoing global financial turmoil and also analyse her strategies in addressing those
challenges.
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17.
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https://www.freepressjournal.in/business/videocon-icici-bank-loan-case-all-you-need-
to-know-about-controversy-surrounding-chanda-kochhar/1248118
SOURCES
• https://www.careerguide.com/blog/career-story-chanda-kochhar-icici-icon
• https://www.moneycontrol.com/news/business/chanda-kochhar-a-look-at-the-career-
and-controversial-exit-of-icici-bank-ceo-and-md-2606201-8.html
• https://www.mbarendezv ous.com/motivational-story/chanda-kochhar/