The ICICI bank has approached the Bombay High Court seeking the effect of “termination of appointment” of Chanda Kochhar as its Managing Director and CEO, and also sought recovery of various amounts from her.
In a monetary suit filed on January 10, the bank sought the dismissal of Kochhar’s petition and stated that the issue can be decided in a commercial suit. “ICICI has filed a suit seeking recovery of amounts towards the clawback of bonuses given to the petitioner (Kochhar) from April 2006 to March 2018 pursuant to the termination of the petitioner’s services,” the bank said in its affidavit.
A clawback is a provision in which incentive-based pay, like a bonus, is taken back from an employee by an employer following misconduct or declining profits.
The affidavit was submitted in response to a petition filed by Kochhar challenging her sacking, months after she voluntarily left the second-largest private sector lender. “On December 8, 2016, Kochhar executed a clawback agreement with the bank pursuant to which ICICI is entitled to a return of the previously paid variable pay or deferred variable pay from the petitioner in the event of a determination of gross negligence or an integrity breach by Kochhar.
“The petitioner’s conduct has caused substantial embarrassment to the bank and all the stake-holders, and has led to an irreparable reputational loss to the bank,” it stated. The bank further stated that Kochhar flagrantly violated the ICICI Group Code of Business Conduct and Ethics.
“The petitioner (Kochhar) deliberately committed the violation with a malafide intent to obtain illegal benefits,” it stated.
The affidavit further said that Kochhar’s petition challenging her sacking by the bank claiming violation of RBI rules is a “malafide attempt” to secure valuable stock options of the bank.
A division bench of Justices R V More and S P Tavade on Monday (January 13) directed Kochhar’s advocate Sujay Kantawala to go through the affidavit. It posted the matter for further hearing on January 20.
Kochhar moved the HC on November 30, 2019, challenging “termination” of her employment by ICICI Bank, which also denied her remuneration for her alleged role in granting “out of turn loans worth ₹3,250 crore to Videocon Group which benefitted her husband Deepak Kochhar.”
Kantawala argued that Kochhar’s termination from her post came months after the bank approved her voluntary resignation on October 5, 2018, and therefore the bank’s action is “illegal, untenable, and unsustainable in law”.