Kochhar may be penalised Rs 1 crore by Sebi for lapses

New Delhi: For alleged violation of listing disclosure norms regarding ‘conflict of interest’ in business dealings of her husband with Videocon group, market regulator Sebi favoured adjudication proceedings against ICICI Bank CEO Chanda Kochhar and the bank, too.

While ICICI Bank may face a penalty of up to Rs 25 crore under the relevant Sebi regulations for such lapses, Kochhar may be fined up to Rs 1 crore, besides other penal actions, a senior official said.

The adjudication process will start formally soon after taking into account the replies to the show cause notices issued by Sebi to ICICI Bank, Kochhar and others in this matter, the official added. The cases under scanner include the bank’s Rs 3,250 crore loan to Videocon Group in 2012 and the involvement of Kochhar’s family members in restructuring of the loan.

A preliminary examination by regulator Sebi has favoured adjudication proceedings against ICICI Bank and its CEO Chanda Kochhar for alleged violation of listing disclosure norms regarding ‘conflict of interest’ in business dealings of her husband with Videocon group.

ICICI Bank may face a penalty of up to Rs 25 crore under the relevant Sebi regulations for such lapses, while the fine for Kochhar may go up to Rs 1 crore, besides other penal actions, a senior official said.

The adjudication process will convene formally soon after taking into account the replies to the show-cause notices issued by Sebi to ICICI Bank, Kochhar and others in this matter, the official added.

Last week, Sebi Chairman Ajay Tyagi had said the regulator is yet to receive a reply from ICICI Bank on the allegations involving Kochhar.

Kochhar and her family members are facing allegations of quid pro quo and conflict of interests with respect to a loan extended to certain entities.

Kochhar has admitted the mistake

  • As per the report, Kochhar has admitted that her husband Deepak Kocchar has had many dealings with Videocon Group over the last several years. Besides, it has also been admitted by her that Deepak Kocchar & Venugopal were co-founder and promoters of NuPower.
  • Further, in June 2009, shares of Dhoot and Pacific Capital (owned by Deepak Kocchar’s father and sister-in-law) in NuPower were sold to Supreme Energy. Also, Dhoot continues to hold interest in NuPower through debentures.
  • The cases under scanner include the bank’s Rs 3,250 crore loan to Videocon Group in 2012 and involvement of Kochhar’s family.
  • Association of Deepak Kocchar and Videocon has also been confirmed in case of Credential Finance. On the basis of the preliminary report, Sebi has concluded that there was conflict of interest in the transactions of ICICI Bank with Videocon.
  • By not disclosing the details of her husband’s dealings with Videocon, Kochhar has not complied with the provisions of listing agreement. Further, the bank also failed in ensuring that its directors comply with listing rules, the official said.

(With agency inputs)