From Forbes’ lists to CBI handcuffs: The rise and fall of Chanda Kochhar

Update: 2022-12-24 11:39 GMT
The CBI has alleged that Chanda Kochhar and her husband did not cooperate in the investigation | File photo: PTI

Former ICICI Bank MD and CEO Chanda Kochhar, who the CBI has arrested in connection with a cash-for-loan scam, was instrumental in making the bank the biggest private-sector lender in India.

Kochhar, in fact, was the first woman to head a large lender in the country. There was a time when she would be a regular feature on Forbes’ top global honchos’ lists.

The Central Bureau of Investigation (CBI) arrested her on Friday, along with her husband Deepak Kochhar, for alleged cheating and irregularities in loans sanctioned by ICICI Bank to Videocon Group companies. They were called to the agency headquarters and arrested after a brief questioning session.

Also read: ICICI Bank’s ex-CEO Chanda Kochhar, husband sent to CBI custody till Dec 26

Kochhar’s chapter at ICICI Bank ended abruptly in 2018 when the board of directors approved a request from her to seek early retirement following allegation of conflicts of interest, lack of disclosures, and quid pro quo while extending loans to the now bankrupt Videocon Industries.

Meteoric rise

Kochhar, a favourite of the then group chairman KV Kamath, joined ICICI, an infrastructure lender in its earlier avatar, as a management trainee in 1984. She rose to play an important part in its transformation into a retail-focused lender when it turned into a commercial bank in the early 1990s. It went on to become India’s largest private-sector lender.

In 2009, she was chosen to succeed the larger-than-life Kamath as the managing director (MD) and chief executive officer (CEO) despite a strong leadership bench. Her elevation also led to the exit of Shikha Sharma (former Axis Bank chief), who was senior to her in ranking in the group.

Before her elevation to the corner office, Kochhar was a key member of the bank’s management, oversaw the retail business, and was also chief financial officer. While Kamath faced many bank runs during his tenure, Kochhar’s firm control on the institution led to a complete stoppage of such negative press. There was just one bank-run incident during her tenure.

Also read: ICICI Bank seeks recovery of amounts from Chanda Kochhar

When a Reserve Bank of India (RBI) review in 2015 found a high number of under-reported dud assets with the bank, she announced a new strategy of concentrating only on well-rated borrowers.

Kochhar also championed many social causes but it was her inspiring rise to the top that was most admired. Yet, she perplexed many with her contrarian views, like girls lack quantitative analytical skills, leading to limited number of women in B-schools.

A hyphenated relationship

Over the years, Kochhar’s leadership of the bank became a hyphenated one, wherein she came to define ICICI Bank. That was until the announcement of her formal exit six months after allegations of impropriety first cropped up. However, she had been on an indefinite leave after the board was forced to launch an external probe into the entire issue.

The reasons for Kochhar’s ouster pertained to a loan to Videocon and the business dalliances between its promoter Venugopal Dhoot and her husband Deepak Kochhar. Dhoot had invested in and subsequently exited a power company promoted by Deepak, and Chanda did not recuse herself or disclose this when a loan was granted by ICICI Bank to Videocon as part of a consortium.

Also read: ED arrests Chanda Kochhar’s husband in money laundering case

Initially, she enjoyed the full backing of the board but lost support as the list of allegations kept growing, with more names, such as an Essar Group shell company of the Ruias, emerging among those with which the Kochhar family had links.

However, the gains from the Ruia ties were only a fraction of Videocon’s loan of Rs 3,250 crore in FY11, which soon turned dud. These allegations led to probes by multiple agencies, including the CBI, Enforcement Directorate (ED), and Serious Fraud Investigation Office (SFIO).

Finally, it was a complaint by an unnamed whistleblower that proved to be her undoing.

The downfall

After exonerating her initially in the Videocon allegations, the bank launched an independent probe by retired judge BN Srikrishna, and Kochhar went on indefinite leave pending the inquiry. This led to Sandeep Bakhshi being made the chief operating officer (COO) to oversee the day-to-day operations.

Kochhar had six months to go before her term expired in March 2019. Regulations allow private-sector bank chiefs to continue till the age of 70. Her offer to resign was accepted with immediate effect.

Also read: PMLA case: No coercive action against Chanda Kochhar, ED assures SC

In the past few months, shareholders have sought clarity on the issue at annual meetings and raised concerns over the bank’s move to appoint her as the chairman of the group’s securities arm. Kochhar, who maintained a huge public profile, had been away from public glare since her forced leave.

From a performance perspective, when she took over ICICI Bank, it was the second largest in the system and the largest among its private-sector peers. But at the end of her career, it slipped to a distant third spot in the sector and the second largest private-sector lender after HDFC Bank.

(With agency inputs)

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