On 30th August, at the ICICI Securities Ltd. Annual General Meeting, Chanda Kochhar won the resolution for her reappointment. She became the Director on the board of ICICI Securities after gaining a comfortable margin.
Despite proxy advisory firms advising shareholders to reject the proposal, ICICI Bank voted to reappoint Chanda Kochhar.
Currently, MD and CEO, Kochhar is on leave, pending the outcome of an independent probe. The probe is looking at allegations of conflict of interest and quid pro quo. She also cannot attend board meetings. However, she has offered herself for re-election.
Reappointment as Director
ICICI Bank holds nearly 80 per cent stake in the broking arm. According to sources, the bank was bound by protocol to pass the resolution and re-appoint Kochhar.
As per the company’s data in accordance with stock exchanges, of the total 27.98 crore votes cast, 97.68 per cent were in favour of the resolution to re-appoint her. The parent ICICI Bank Ltd constituted 91 per cent of the total votes cast.
Kochhar also received considerable support from public investors. 73.6 per cent of the institutional votes favored her, while 79.3 per cent public shareholders supported her.
ICICI Bank shareholder, Arvind Gupta, said: “Not voting in favour will send signals that allegations about Kochhar aren’t entirely baseless. The board has done what was expected of it (passing the resolution).”
He also added that since the outcome of the probe was pending, the board couldn’t have left the directorship vacant.
Shriram Subramanian, founder, InGovern Research Service, told TNIE, “ICICI Bank should’ve avoided the situation (preventing Kochhar from offering herself for re-appointment). By passing the resolution, the board is sending mixed signals to investors.”
He also added that since Kochhar is on leave, the purpose of her re-election is defeated. “The bank should have ideally clarified on the pending probe and when its outcome is expected.”
Advising Shareholders to Re-Consider
US proxy firm Glass Lewis said, “We note that there are significant legal and regulatory issues involving the company’s non-executive chair, nominee Chanda Deepak Kochhar. We believe shareholders should be very concerned about the matters facing Kochhar, which includes her being forced to take a leave of absence from the ICICI Bank Board, pending the outcome of the investigation.”
Institutional Investor Advisory Services (IiAS) also appealed to the shareholders to oppose Kochhar’s reappointment.It said: “We believe she should be reappointed to the board only after all charges against her have been cleared.”
Probe in Progress
Since July 19, Chanda Kochhar has been on leave. She is facing investigation from multiple agencies for alleged impropriety on her part extending loans to some firms including Videocon Group, in return for reciprocal benefits.
Earlier, ICICI Bank had dismissed these allegations. But later it initiated an independent probe into the allegations of conflict of interest.
Megha Thadani is an Intern with Shethepeople.tv