Chanda Kochhar at ICICI bank: lessons

in governance
Bala Bhaskaran

Prologue Bala Bhaskaran is a Senior

Faculty at Entrepreneurship
Just when the Indian lark, a tiny bird found in the bushes of Western Ghats, was heralding Development Institute of
the arrival of spring in 2018, a whistle-blower in the business-jungle of Mumbai, was India, Ahmedabad, India.
trumpeting the conflict of interest (COI) implicit with the Industrial Credit and Investment
Corporation of India (ICICI)-Bank’s decision to lend INR32.50bn to the Videocon Group. The
bank authorities, after a prolonged silence, denied any incidence of corruption or
negligence from the bank’s side. Arvind Gupta, the whistle-blower, continued to press the
matter in each and every forum that he had access to. As the names of one of the largest
private sector banks of India and its chief executive officer (CEO) were involved, and, as
Arvind Gupta, trustee of a non-profit organization representing investors, was no push-over,
the truth could be somewhere in between. This case is an exploration into the background
of this situation.

“Conflict of interest”?
Arvind Gupta, Trustee of Indian Investors Protection Council, alleged COI, involving Chanda
Kochhar on two counts:

1. Deepak Kochhar (husband of Chanda Kochhar) and Venugopal Dhoot (Chairperson of

Videocon Group) were friends and business associates since long. When Deepak
floated his first company Credence Finance Ltd, in 1995, Venugopal Dhoot had
significant interests in it. In 2008, Deepak Kochhar and Venugopal Dhoot co-promoted
NuPower Renewables Pvt Ltd [NRPL] as a 50:50 joint venture. In 2012, a consortium of
banks, led by ICICI Bank, had approved facilities aggregating to INR400bn to Videocon
Group [1]. ICICI Bank had a share of INR32.50bn in this. Chanda Kochhar, CEO of ICICI-
Bank, had to reconcile her official responsibilities vis-a-vis her personal association to Mr.
Dhoot through her husband. This amounted to “COI [2]”. To safeguard the bank’s
interests and her integrity, Chanda Kochhar should have notified the bank about the COI
officially and recused from the decision-making. Ambiguity in this matter has given
strength to the allegation of the whistle-blower. Closely after the consortium decision,
NRPL received a loan of INR640m from within the Videocon Group. Arvind Gupta alleged
this to be a quid-pro-quo transaction favouring the Kochhar family.
2. Avista Services Group, Singapore, a firm belonging to Rajiv Kochhar (Deepak Disclaimer. This case is written
solely for educational purposes
Kochhar’s brother and Chanda Kochhar’s brother-in-law) was offering debt- and is not intended to represent
restructuring [3] services. Many of the clients of this firm were also clients of ICICI-Bank. successful or unsuccessful
managerial decision-making.
Each of these signified a situation of COI to Chanda Kochhar. Apparently, Chanda The authors may have dis-
guised names; financial and
Kochhar had not followed the due process of notifying the bank about the COI situation other recognizable information
on each occasion. to protect confidentiality.

DOI 10.1108/EEMCS-03-2020-0076 VOL. 11 NO. 1 2021, pp. 1-19, © Emerald Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1
 These were the issues raised by Arvind Gupta. They were pertinent and sensitive in the
interest of transparency and good governance. In the judiciary, instances of “COI” are
observed very minutely and judges make disclosures voluntarily to avoid embarrassment to
the system, to the individuals and to ensure justice and fair-play.

Background
Besides ICICI-Bank as the lender and Videocon Group as the borrower, there were three
key players in this case – Chanda Kochhar, Deepak Kochhar and Rajiv Kochhar.
Chanda Kochhar (Chanda Advani before marriage), a post-graduate in management from
Bombay University, joined as Management Trainee at Industrial Credit and Investment
Corporation of India Ltd (ICICI Ltd), a prominent national level Development Financial
Institution, in 1984. In 1986, she married Deepak Kochhar, a class-mate during post-
graduation. In the early 1990s, ICICI Ltd became ICICI-Bank Ltd. Chanda Kochhar
belonged to the core team of ICICI-Bank that ushered in modern-day-electronic banking in
India [4]. She rose within the bank gradually to become Managing Director (MD) and CEO
in 2009. In 2011, she was awarded Padma Bhushan [5].
Deepak Kochhar, son of an Army officer and a post-graduate in management from Bombay
University, went abroad for higher studies. On return, he entered business; married Chanda
Advani in 1986. His business interests included

1. Credential Finance Ltd:

䊏 Floated in 1995 to carry out financial services with himself as the Managing
Director. His family members [consisting of himself, brother (Rajiv), wife (Chanda)
and four others] held 2% shares of the company (Live Mint, 2018a). Venugopal
Dhoot and associates held a major part.
䊏 In 2003, Banque Indo-Suez filed a winding up petition against the firm in the
Bombay High Court for dues of INR4.0m. The winding up of the company was
ordered on 18th March 2008 (Kochhar, 2018). This was avoided as the promoters
managed to find a well-wisher to pay up the dues. Many creditors such as the State
Investment Corporation of Maharashtra, the investment arm of the state of
Maharashtra, had written off their dues as there was no way of recovering them.
䊏 By 2010, Chanda Kochhar held no shares in this company. Other family-members
continued to hold shares. Videocon Group had reduced its holdings to 4.88%.
䊏 In August 2017, the company got de-listed from Bombay Stock Exchange for non-
payment of dues.

2. NuPower Renewables Ltd (NRPL):

䊏 Floated in 2008 as a 50:50 joint-venture, between Deepak Kochhar and Venugopal
Dhoot to carry out the business of solar power. Within months Venugopal Dhoot
transferred his holding to Mahesh Chandra Punglia, an associate.
䊏 In 2011/2012 Supreme Energy Pvt Ltd, a firm belonging to the Videocon Group
gave NRPL a loan of INR640m to expand its business.
䊏 In 2013, Pinnacle Trust, a non-profit entity owned and controlled by Deepak
Kochhar acquired Supreme Energy Pvt Ltd for INR0.9m. As per the terms of the
loan, the amount of INR640m was repayable over a period extending up to 2021.
Rajiv Kochhar, younger brother Deepak Kochhar, was involved in business along with
Deepak Kochhar till 2000. In 2000, he started Avista Advisory Group with offices in
Singapore, Jakarta, Dubai and Mumbai. Avista was engaged in debt-restructuring, in the
international financial markets. In 2018, it had many Indian-origin firms as clients, who were
also clients of ICICI-Bank. Some of these were Jaiprakash Associates Ltd., Jaiprakash

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Power Ventures Ltd., GTL Infrastructure Ltd, Suzlon Ltd., Jindal Steels Ltd. and Videocon
Group. These clients have been acquired since 2011 and the quantum of debts under
service aggregated to $1.70bn (Indian Express, 2018).
ICICI-Bank was the second-largest private-sector bank in India in 2018. It started as a
Development Financial Institution in the mid-1950s, with the active support of the World
Bank, to provide industrial finance in India. ICICI Ltd soon emerged as a prominent
industrial catalyst in the country. ICICI Ltd was instrumental in promoting the first housing
finance company of the country [Housing Development Finance Corporation Ltd.] as also
the first credit rating company of the country [Credit Rating and Information Services of
India Ltd. (CRISIL)]. In the early 1990s, it was converted into a bank [ICICI-Bank Ltd]. It had
maintained an illustrious track-record all along.
Videocon Group of Industries was founded in 1979. In 2017, it had manufacturing facilities at
17 locations in India and facilities across China, Poland, Italy and Mexico. The businesses
included consumer electronics, home appliances, electronic components, office automation,
mobile phones, wireless, internet, petroleum, satellite Tele Vision, etc. Venugopal Dhoot, had
pioneered the growth of the Group. In 2017, the flagship company of the group, Videocon
Industries Ltd had turnover of INR130bn (US$1.95bn); the group turnover was US$5.5bn.

The trigger: allegations from Arvind Gupta

The controversy and hype were triggered by Arvind Gupta’s letter to Prime Minister of India
on 15th March 2016 [6]. As trustee of the Indian Investors Protection Council, he has been
championing the interests of investors. Arvind Gupta alleged that Videocon Group was
characterized by murky dealings all along and that Chanda Kochhar, as MD and CEO of
ICICI-Bank, had misused her position to favour the Videocon Group. Some of the salient
points listed by him were:

1. On Videocon Group.
䊏 Videocon had a joint-venture with Gujarat Narmada Valley Fertilizer Corporation Ltd
(GNFC Ltd) for electronic components. This company planned an initial public
offering (IPO) in September 1992 at a premium on the face-value. Arvind Gupta
argued that the premium was very high and resisted the IPO through all possible
forums. Eventually, the Monopolies and Restricted Trade Practices Commission
refused consent and stalled the IPO [7].
䊏 The debt-level of the Videocon Group was too high for its operations to service. The
debts had risen from Rs120.00bn in FY2011 to Rs 454.05bn in FY2015. Auditors had
recorded a default of Rs. 18.20m in FY2015. Credit Suisse had ranked Videocon
Group as the fourth largest “house of debts” in India (Live Mint, 2015) in 2015.
2. On business connection between Kochhar family and Videocon Group
䊏 NRPL, a 50:50 JV between Deepak Kochhar and Venugopal Dhoot, was founded in
2008. Kochhar family held shares in NRPL in the names of its family members and
Pacific Capital Services Pvt Ltd. Pacific Capital Services Pvt Ltd, in turn, was held
by Neelam Advani [Chanda Kochhar’s brother’s wife – 90%] and by Virendra
Kochhar [Deepak’s father – 10%].
䊏 In 2009, the entire shares of the Kochhar family in NRPL was transferred to Pinnacle
Energy [a trust controlled by Deepak Kochhar]. Similarly, Venugopal Dhoot, through
a series of transactions, transferred his block in NRPL to Supreme Energy Pvt Ltd.
䊏 In 2012, Supreme Energy lent Rs 640m to NRPL from funds mobilized from within
the Videocon Group. Through a series of share-transfers and issue of zero-coupon
convertible bonds [8], by 2015 Pinnacle Energy became 93% shareholder of NRPL
leaving full control with Deepak Kochhar.

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 3. In 2012, Videocon Group availed INR32.50bn from ICICI Bank as part of an aggregate
loan of INR400bn from a consortium of 20 banks. In addition to this, INR6.60bn worth of
foreign loans were availed by Tuskar Overseas Inc., a firm belonging to the Videocon
Group based in the Cayman Islands [9], from the UK and Canada branches of ICICI
Bank. For this loan, domestic companies of the Videocon Group had given guarantees.
So, the overall exposure of ICICI-Bank to the Videocon Group, in 2012, was
INR39.10bn.
4. During 2010–2012, NRPL had received INR3.25bn from First-land Holdings Ltd by way
of Compulsorily Convertible Preference Shares [10] [CCPS]. Afterwards, the ownership
of the funds was transferred to DH Renewable Holdings Ltd. In 2014 NRPL received
another INR660m from DH Renewable Holdings Ltd. DH Renewable Holdings was
observed to be a wholly-owned subsidiary of Accion Diversified Strategies Fund
Securities and Futures Commission, a company incorporated in Cayman Islands with
headquarters at Singapore. Arvind Gupta was unable to track this company’s
ownership, parentage and dealings with any Indian company.
Based on these Arvind Gupta concluded that what was visible was only the tip of the iceberg,
and hence, he pleaded for investigation from government agencies and the regulatory bodies.
He pursued the matter with a supplementary letter on 18th Feb 2017 (Letter of Arvind Gupta
dated, 2017) highlighting that in the intervening period between his two letters.
䊏 Videocon Group’s performance had deteriorated. Debt-level had risen further and
Credit Analysis and Research Ltd. (CARE) [11] had downgraded the Group’s rating.
䊏 ICICI Bank had shown a declining trend in profits. Quantum of bad loans have
increased significantly. Non-performing assets (NPAs) have literally doubled [12].
In May 2018, Arvind Gupta made further disclosures (Hindu Business, 2018; Business
Standard, 2018b), which tended to offer some of the missing links in the jigsaw puzzle.
䊏 The ownership pattern of NRPL had undergone further changes: 54.99% of shares
were held by DH Renewable Holdings Ltd and 33.17% by Pinnacle Energy.
䊏 During 2010–2012, First Holdings Ltd subscribed to CCPS of NRPL amounting to
INR3.25bn. According to Arvind Gupta, this had come from the Essar Group in return
for the sweet deals it received from ICICI-Bank during 2010–2012. The Essar Group
had availed $530m from a consortium led by ICICI Bank in 2019 to acquire Essar Steel
Minnesota in the USA and Algoma Steel in Canada. Around the same, Essar Group had
availed $350m from another consortium led by ICICI-Bank to acquire Stanlow Refinery
in the UK. Eventually, all these investments had turned bad and the Group faced
liquidation and bankruptcy proceedings on all of them.
䊏 According to Arvind Gupta
䊏 ICICI-Bank was liberal in evaluating and granting loans to the Essar Group.
䊏 Essar Group acknowledged the favours through “round-tripping” [13] investments
worth INR3.25bn into NRPL.
䊏 Representatives of Essar Group had refuted all of these.

Responses
These allegations tended to connect the dots fairly well. Though Arvind Gupta had raised
the issues way back in March 2016, nothing seems to have stirred till about March 2018.
The buzz on social media seemed to have stirred the mainstream media to action from
March 2018 onwards (Goan Observer, 2018).

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The first response of ICICI-Bank was a press briefing by its Chairman N K Sharma
(Bloomberg Quint, 2018a) in March 2018. He defended the internal processes of the bank,
the credibility and character of its CEO, as well as the decisions taken by the bank. He
denied nepotism within the bank and castigated the allegations as attempts at defaming the
bank and its senior most executive (Business Standard, 2018a; Live Mint, 2018b). At one
stage, he said the bank was waiting for a signal from Reserve bank of India (RBI) (Economic
Times, 2018a); at another stage, he said the bank was awaiting the outcome of the Central
Bureau of Investigation (CBI) inquiry.
A bank with global operations and with shareholding in India and abroad needed to respond
promptly and proactively to any allegation. The delay in response and the blanket-denial-
mode of the response raised more eye-brows than quench the existing apprehensions.
Persistent allegations could only hamper the reputation and image of the bank.
Global rating agency Fitch [14] observed surprise at the bank’s attitude of not being open to
investigation; in fact, Fitch felt this negatively impacted the reputation and image of the
bank. Statement of Piyush Goyal from the Ministry of Finance (in June 2018) (PTI, 2018a),
CBI’s decision (The Hindu, 2018) 0020to initiate a Preliminary Enquiry (in March 2018) and
Securities Exchange Board of India (SEBI’s) response (in March 2018) (Live Mint, 2018c)
may have been triggered by the letters of Arvind Gupta addressed to various Govt
agencies including Prime Minister’s Office [PMO].
Securities and Exchange Commission, the US regulatory authority for capital markets,
initiated preliminary enquiries about the allegations in June 2018 (PTI, 2018b). American
Depository Receipts of ICICI-Bank listed in New York Stock Exchange accounted for 24% of
the share capital of ICICI-Bank. This made ICICI-Bank a significant entity in the eyes of the
American and global investors. US brokerage firm Jeffries [15] indicated that allegations of
quid pro quo ran the risk of Class Action suits in the US. Class Action suits were taken up
when a group of persons sue an individual or corporate defendant for financial or other
damages caused by negligence or mismanagement. Such litigation could be extremely
costly for the bank in two ways: if found guilty the damages could be extremely high.
Initiation of the suit itself would result in the erosion of its brand image leading to declining
stock-prices and the consequent losses to the shareholders.
If Chanda Kochhar had really notified the bank and placed on record the COI, then the entire
members of the ICICI-Bank board could be party to the Class action suit. Law firms in the US
would any day relish the opportunity of Class Action suits, as the pay-offs tended to be very high.

Business transactions alleged by Arvind Gupta

According to Arvind Gupta, the business transactions had the following pattern:
䊏 Videocon Group, a long-time borrower of ICICI-Bank, was in financial distress in 2012.
It got a lenient treatment by ICICI-Bank and the consortium of lenders because the CEO
of ICICI Bank chose to ignore stricter options.
䊏 This benign treatment elicited a quid-pro-quo instantly in the form of a soft loan
(INR640m) into the books of NRPL from the Videocon Group.
䊏 In 2010, Essar Group had availed US$530m and US$350m in two separate deals from
ICICI Bank for acquisitions abroad. These transactions triggered INR3.25bn in the
books of NRPL in the form of CCPS. The subscriber was a company registered in one of
the tax-havens abroad. All these acquisitions had turned bad eventually and by 2018,
the parent company was in bankruptcy proceedings.
䊏 Avista Advisory Group, a Singapore-based firm became the favourite advisory firm for
debt-restructuring services abroad, for clients of ICICI-Bank.

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 Arvind Gupta alleged that all these transactions, had a certain definite pattern, namely,
each proposal was financially weak and vulnerable, the decision-making was at ICICI-Bank
and each of them triggered cash-flows into NRPL or Avista.
The structure, operations and antecedents of NRPL definitely warranted scrutiny. It was a closely
held company with abnormal share transactions. It had attracted funds from within and from
abroad with no tangible operational track-record. The buildup of this model connected the various
dots and appeared logical. A thorough investigation was required for verification and conviction.

Were there indiscretions?

䊏 On the part of Chanda Kochhar, CEO and MD, ICICI-Bank

Deepak Kochhar and Venugopal Dhoot were business-associates at least since 1995. So,
before any transaction involving the Videocon Group, it was obligatory for Chanda Kochhar
to notify the bank. Similarly, in view of the family connection with Rajiv Kochhar, it was
obligatory for her to notify the bank before any transaction with Avista Group. She was
answerable on each of these transactions.
Videocon Group has been a customer of the bank for decades. Avista has been dealing
with ICICI-Bank since 2011. Whole set of transactions deserved to be investigated.
䊏 On the part of ICICI-Bank:
In 2012, the financial position of the Videocon Group was not good. Any consortium at such
a stage could consider additional facilities only to salvage the existing loans. Before such a
decision, the consortium should have explored the disposal or monetizing of surplus assets
to generate funds for critical operational needs.
As part of “due diligence”, the consortium, should have investigated the investments and
advances across the subsidiary and associate firms within the Videocon Group and
outside. The consortium should have insisted on tighter control and financial discipline. The
loan of Rs 640m to NRPL was a clear indication to the contrary.
ICICI-Bank was a prominent bank of India with global aspirations. It had a global presence
and its shares were listed in international bourses. The impact on its reputation and brand
image would be extremely adverse if the investors came to know that the bank was
continuing with customers involved in un-clean transactions in the international markets.
The bank could not respond proactively for almost two years since the allegation was first
made. The initial responses of denial and defending the processes did not reflect the
degree of sensitivity and maturity expected from a leading bank.
䊏 On the part of Media, Regulators and others
Media took quite some time to wake up to the issue despite the fact that there were dozens of
analysts focusing on the banking sector and more so on a prominent bank such as ICICI-Bank.
Probably its focus was on issues of immediate concern to the readers. Besides, there were only
a few journalists [16] who focused on in-depth research on matters of long-term impact. Media,
readers and investors were still learning to adjust to the challenges of the new competitive era.
Finally, when the board of ICICI-Bank responded with a proactive decision, it must have
been with the prodding’s of all the regulators and agencies – RBI, SEBI, Ministry of Finance,
etc. The stakeholders too were in the process of learning to adjust to the emerging
competitive environment.

Epilogue
In the middle of June 2018, with the appointment of Sanjay Dikshit as COO [Chief Operating
Officer], with CEO Chanda Kochhar being asked to go on leave and with former Supreme

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Court Judge B N Srikrishna [17] being asked to probe the matters, the cloud surrounding
ICICI-Bank was beginning to clear. The share prices also made a modest recovery in an
otherwise subdued market (Financial Express, 2018).
In the first week of June 2018, the National Company Law tribunal admitted Videocon
Industries Ltd under the Insolvency and Bankruptcy Code (IBC) based on the insolvency
petition filed by State Bank of India in December 2017 against the company (Bloomberg
Quint, 2018b).
On 30th June, the board of ICICI-Bank convened a meeting and decided to appoint Girish
Chandra Chaturvedi, a retired Indian Administrative Service officer as the non-executive
Chairman, in place of N K Sharma whose term ended on 30th June 2018. G C Chaturvedi’s
term was three years from 1st July 2018. G C Chaturvedi was known to be a no-nonsense
officer who had served in the finance ministry earlier. This announcement also boosted the
stock market sentiments a bit [18].
India of 2018 was characterized by an emerging market scenario with fast technological
changes and shifting competitive structures. The existing rules, regulations and codes of
conduct were very often inadequate to cope with the emerging challenges. They were
evolving continuously. Indian enterprises were increasingly becoming global and had to
adjust to the global standards of performance and corporate governance in every field.
Invariably there were gaps in regulations, practices and mindsets. The crisis that
ICICI-Bank and Chanda Kochhar were going through was a reflection of this situation.
On 30th January 2019, the Board of Directors of ICICI-Bank discussed the report of the
Committee of Inquiry headed by Justice B N Sri Krishna (Bloomberg, 2019). The salient
observations were:
䊏 Chanda Kochhar was in violation of the bank’s code of conduct.
䊏 Chanda Kochhar failed to discharge her fiduciary duty to recuse herself to avoid any
COI.
䊏 Bank’s processes were rendered ineffective by her approach to disclosures and
avoidance of conflict.

Based on the above, the Board decided

“to treat Ms. Chanda Kochhar’s separation from the bank as ‘Termination for Cause’ under the
Bank’s internal policies, schemes and code of conduct, with all attendant consequences
(including revocation of all her existing and future entitlements such as unpaid amounts, unpaid
bonuses or increments, unvested and vested & unexercised stock options and medical benefits)
and require the claw-back of all bonuses paid from April 2009 until March 2018 and to take such
further actions as may be warranted in the matter.”

While bringing a closure to the issues raised by Arvind Gupta, in early 2016, the decision of Keywords:
Corporate governance,
the Board reiterated the processes of governance of large publicly held companies. Governance guidelines,
Perhaps, it would emerge as a bench mark in guiding future generations of executives, Investor relations,
regulators, media and investors. Leadership

Notes
1. Consortium: When a large loan is to be provided, very often a set of banks come together and form
a consortium of lenders to provide the same at almost identical conditions. The loans are shared in
specific proportions by internal agreement among the members of the consortium. During
repayment, the amounts are shared among the members proportionately.
2. “COI” refers to a situation where one’s personal interests and professional duties or interests
interact, very often, at cross purposes. An example will clarify the principle. In the bankruptcy court
where Ruchi Soya Ltd, a company engaged in manufacture of edible oils, was being auctioned;

VOL. 11 NO. 1 2021 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 7

 Patanjali Ayurved and Adani Wilmar were the prime bidders. The court had appointed Cyril Shroff,
Head of Cyril Amarchand Mangaldas as the Resolution Professional [RP] to oversee the bidding
process. Counsel for Patanjali Ayurved pointed out COI with respect to Cyril Shroff. He pointed out
that Cyril Shroff’s daughter was married to the son of Gautam Adani Chairman of Adani Wilmar Ltd.
So, Cyril Shroff besides being Counsel for Adani Wilmar was connected to the family of Gautam
Adani, Chairman of Adani Wilmar Ltd; hence, it would be inappropriate to have him as the RP of the
bidding process. This was accepted immediately and Cyril Shroff was replaced by Luthra and
Luthra (Economic Times, 2018a).
3. Debt-restructuring. Generally, loans are given to enterprises either to acquire specified assets or
towards working capital. The loan-repayment schedules are worked out based on the expected/
future cash-flows of the enterprise emanating from the performance of the future years. Very often
the actual performance fails to reach the expected levels either because of technical or managerial
deficiencies or because of unfavourable external market conditions; this leads to defaults in
repayment commitments. Then the loans are said to have become “sticky” or “distressed”.
Lenders, very often with the help of external experts, review the firm’s capabilities in the emerging
economic and marketing scenario. If they are convinced that in the given scenario, it is impossible
to recover the entire dues in reasonable time horizon, they would agree to scale down the dues so
that the borrower is able to service/repay the dues in reasonable period of time. This process is
known as “debt-restructuring”. The restructuring is done by waiving part of full portion of the
accumulated interest, reducing interest-rate on part of the loans, converting part of the principal
amount into equity or quasi-equity etc. The restructuring process demands expertize in financial
engineering and advisory firms take up such assignments for a fee. Avista Advisory Group was one
such firm.
4. N Vaghul, Chairman and KV Kamath had converted ICICI-Bank [formerly ICICI Ltd] into a school of
bankers grooming and churning out an army of high-profile bankers. Chanda Kochar was one of
these. Some other prominent ones were Kalpana Morparia, Lalita Gupte, Shikha Sharma, V
Vaidynathan, Renuka Ramnath etc. For more details read: Fortune India (2010).
5. Padma Bhushan. This is one of the highest civilian honours of India given by the President of India
on the Republic Day of every year. Padma Bhushan is given for “distinguished services of the
highest order”. Chanda Kochhar was given this award in 2009 for her distinguished services in the
banking sector.
6. Letter of Arvind Gupta to Prime Minister of India and copies to various agencies/Depts on 15 March
2016. https://www.scribd.com/document/374791128/Complaint-of-Arvind-Gupta-on-ICICI-Bank-
Videocon-Loan-FraudsRetrievedon 11th June 2018.
7. When a new company does a public issue for the first time [IPO], premium on the face-value of the
shares is not permitted. However, if the company is promoted by one or more well-known
companies, premium is permissible. The quantum of the premium has to be justified in terms of the
track-record or credibility of the promoting companies. In the case of the JV between Videocon
Group and GNFC, Arvind Gupta was challenging the proposed premium on the ground that the
track-record of Videocon Group was not without blemish.
8. Zero-Coupon-Convertible-Bonds are convertible bonds, which carry no-interest from the date of
subscription till the date of conversion. The investor subscribes to such bonds only in the hope of
getting high value on the equity shares after conversion.
9. Cayman Islands is a group of four islands under British protectorate. It is tax haven where more
than 100,000 companies are registered. It is an International Financial Centre where substantial
financial transactions take place, mostly without the incidence of tax, and hence, many
businessmen prefer to have their deals made here to avoid scrutiny.
10. CCPS are preference shares that are mandatorily converted into equity shares at a specified date.
The investor is assured of pre-decided dividend when they are CCPS and on conversion they get
dividend as any other equity share-holder.
11. CARE is a leading Credit Rating Agency in India. Other prominent ones are CRISIL and ICRA.
12. NPA: Non-Performing Asset. Loans are advances made by the lender and they are shown as
assets in the books of the lender. When the loans become sticky or bad the lenders do not get any
return. Then they become NPAs to the lender.
13. “Round-tripping” refers to a closed circuit of favours. Arvind Gupta implied that ICICI-Bank’s
advances to Essar Group amounted to an undue favour from the Kochhar family. This was being
returned to the Kochhar family by the Essar Group when First land Holdings Ltd/DH Renewables
Ltd by subscribing to CCPS in NRPL aggregating to INR3.25bn. Though he was unable to show
evidence to these connections, his letter implied a circuitous route of investments to return the

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 favours. Curiously in the top-10 “house of debts” in India prepared by Credit Suisse in their report,
Essar Group was listed at no.6 and Videocon Group at No.4 [Please see End Note No.9 for
reference to the Credit Suisse report.]. Much later, Essar Group went through the proceedings
under the IBC and the flagship company of the Group, Essar Steel India Ltd has been acquired by
ArcelorMittal Nippon Steel India Ltd., a 60:40 joint venture company between ArcelorMittal and
Nippon Steel Corporation, Japan, for a sum of INR500bn (Economic Times, 2019.)
14. Global rating agency, Fitch expressed serious doubts about the corporate governance practices of
ICICI-Bank. “The presence of the bank’s CEO on this credit committee – and the bank’s reluctance to
support an independent probe – have, in our opinion, created doubts over the strength of its corporate
governance practices”. Economic Times (2018b): ICICI Bank’s corporate governance in doubt: Fitch
Ratings. https://economictimes.indiatimes.com/markets/stocks/news/icici-banks-corporate-governance-
in-doubt-fitch-ratings/articleshow/63681548.cmsRetrievedon 10th June 2018.
15. Capital market intermediary, Jeffries, observed that with circumstances, that ICICI-Bank found itself in,
could warrant class action in the US. New Indian Express (5th April 2018): ICICI-Bank may face Class
action in the US if the charges against Chanda Kochhar were proven. http://www.newindianexpress.com/
business/2018/apr/05/icici-bank-may-face-class-action-in-the-us-if-charges-against-chanda-kochhar-
proven-jeffries-1797178.html Retrieved on 28th May, 2018.
16. Only one media person was candid enough to question the sloppiness of the media in this matter.
This is cited in Goan Observer (7th April, 2018): Chanda Kochhar and Hubby Implicated. http://
www.goanobserver.in/2018/04/07/chanda-kochar-hubby-implicated/ Retrieved on 28th May, 2018.
17. India Today (2018). Former Supreme Court Judge to probe charges against ICICI Bank CEO
Chanda Kochhar. https://www.businesstoday.in/sectors/banks/supreme-court-judge-bn-
srikrishna-icici-bank-ceo-chanda-kochhar/story/279226.html Retrieved on 22nd June 2018. The
tactic of having a former Supreme Court judge carrying out an internal inquiry by the bank was a
clever move. It would move Chanda Kochhar from the hot seat immediately. Whether she was guilty
or not would be decided after the investigation. This would help calm down the public sentiments.
Investors would get an assurance that things would be sorted out and stake-holders’ interests
would be protected. This would help stabilize the share-prices of the bank.
18. As per reports, ICICI-Bank scrip gained by 1.6% on the announcement of the new chairman. See reports
in Business Standard and Economic Times. https://www.business-standard.com/article/finance/ex-
bureacrat-girish-chandra-chaturvedi-named-icici-bank-chairman-118063000060_1.html Retrieved on 1st
July 2018. https://timesofindia.indiatimes.com/business/india-business/icici-bank-appoints-girish-
chandra-chaturvedi-asnon-exec-part-time-chairman/articleshow/64790579.cms Retrieved on 1st July
2018.

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Corresponding author
Bala Bhaskaran can be contacted at: bala.bhaskaran@gmail.com

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