Recent news has reported that a panel was created to probe into Videocon Group promoter Venugopal Dhoot granting to the Kochhar family certain assets to secure special loan terms and other privileges from ICICI Bank, one of India’s biggest national banks. This probe is invlolved in examining property dealings undertaken by Chanda Kochhar and her family since she took over as CEO of ICICI Bank.
According to an Economic Times report, the board of ICICI Bank had requested the panel to determine whether the Kochhar family acquired the assets at concessional or rates lower than that prevailing in the market and whether the sellers of these assets were granted special terms on loans or any other banking privileges with the bank.
The assets in question are certain shares of NuPower Pvt. Ltd. sold by the Videocon Promoter to Deepak Kochhar, husband of CEO Chanda Kochhar, at negligible rates. The conflict arises over the interest on loans worth Rs 3,250 crore (approximately 450 million dollars) granted by ICICI Bank to the Videocon Group.
The board also ordered an independent inquiry on receiving two letters alleging a code violation by Kochhar. A show cause notice was sent by SEBI (Securities and Exchange Board of India) to ICICI with respect to the alleged business irregularities involving its CEO and her family.
Organizations often choose settlement of these proceedings through a consent order meaning an order settling administrative or civil proceedings between the regulator and a party under inquiry who may prima facie be found to have violated securities laws. It may settle all issues or reserve an issue or claim, but it must precisely state what issues or claims are being reserved. A Consent Order may or may not include a determination that a violation has occurred.
Sebi Chairman Ajay Tyagi also said that he has no information about any settlement application filed by the bank, a Sebi member has subsequently clarified that the bank has not filed any formal application.
The bank and Kochhar have been maintaining that there has been no regulatory violation on their part and that she was not aware of specific business dealings of her husband.