Market regulatory Securities and Exchange Board of India (Sebi) might impose a maximum penalty of Rs 25 crore on ICICI Bank CEO Chanda Kocchar, if she found guilty in Videocon loan case. According to a Mint report, Sebi is in power to impose a fine but not demand the resignation of ICICI Bank chief if it finds she and the bank did not abide by fair disclosure norms in its ongoing probe.
A maximum penalty of Rs 25 crore, or three times the ill-gotten gains, can be levied under Sebi rules, but in this case, the quantum of the penalty may be at the discretion of Sebi’s adjudicating officer, the report quoted two executives familiar with the development.
“Only a financial penalty can be levied as under the current notice, there is no provision for asking the CEO to step down,” said the first of the two executives, both of whom spoke on the condition of anonymity.
Earlier in May, Sebi has served a notice to ICICI Bank CEO and MD Chanda Kochhar on dealings of the bank with Videocon Group and Nupower, an entity in which her husband Deepak Kochhar has economic interests.
The CBI has launched a preliminary investigation into Rs 3,250 crore loan ICICI Bank had extended to Videocon in 2012 and the possible role of Kochhar’s husband — Deepak Kochhar.
Reports have alleged that Videocon chairman Venugopal Dhoot invested Rs 64 crore in Nu Power Renewables, a firm owned by Deepak Kochhar after Videocon secured a loan from a consortium of banks, including ICICI.
ICICI has denied any wrongdoing in the loan, saying it was part of a consortium of lenders that extended the facility to Videocon.
“The MD & CEO and the Bank received a Notice from SEBI on May 24, 2018 … requiring responses on matters relating to alleged non-compliance with certain provisions of the erstwhile Listing Agreement and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015,” the bank said in the filing.
The notice, it further said has been issued based on information furnished by the Bank/its MD & CEO to diverse queries made by Sebi concerning dealings between the bank and Videocon Group and certain dealings allegedly between Videocon Group and Nupower, an entity in which Deepak Kochhar spouse of MD& CEO has economic interests.
“Appropriate responses would be submitted to Sebi by the bank in accordance with regulation,” ICICI Bank added .
Last month, ICICI Bank Chairman M K Sharma had said the board has full confidence in Chanda Kochhar and ruled out any quid pro quo as alleged with regard to certain loan given to Videocon group.
Earlier, the bank had clarified that none of investors of NuPower Renewables is a borrower of ICICI Bank.
Prasanta Patnaik