Earlier today ICICI Bank issued a statement on findings in the enquiry report of Justice (Retd.) B.N. Srikrishna (Srikrishna Report).
The conclusions of the report were definitive – Ms. Chanda Kocchar had violated ICICI Bank’s conflict of interest policy and failed in her fiduciary responsibility. As a consequence, the report asked for a clawback of her bonuses and stock options from April 2009.
Following the receipt of the report the Board of Directors decided to treat the separation of Ms Chanda Kochhar from the Bank as ‘Termination for Cause’ under the Bank’s internal policies, schemes and the Code of Conduct, with all attendant consequences.
While the severity of the punishment’, the options now open for Chanda Kochhar and to even investors will continue to be debated, the completion of this investigation will help bring some level of closure for the bank’s investors. The CBI investigation will continue to be an overhang, but the burden of proof for a legal process is far higher than an investigation into policy violations. And this report helps distance the bank from the actions its erstwhile CEO.
These developments have been a distraction for the bank in what has clearly been a particularly challenging year for all banks. The conclusive outcome has provided an opportunity to re-examine its processes and strengthen them - especially those related to conflict of interest. ICICI Bank, its employees and the board, must now quickly move on.
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Disclosure: ICICI Bank is one of IiAS’ shareholders. For disclaimers and other disclosures, please see pages four and five of this report.