If Audi chief executive Rupert Stadler can be arrested for cheating on diesel emissions tests, why can’t the CBI swiftly probe charges of ‘favouritism and impropriety’ against ICICI Bank managing director Chanda Kochhar? The Justice BN Srikrishna panel has been set up to probe Kochhar for her reported charges of quid pro quo, nepotism and conflict of interest. Markets watchdog, the Securities and Exchange Board of India (Sebi) initiated its own investigation into big bungling at India’s largest private bank that initially stonewalled charges of corruption against its managing director about three months back.
The CBI is trying to unravel the truth behind how Kochhar favoured Videocon with a loan worth Rs 3,250 crore, reportedly in lieu of Venugopal Dhoot’s deal with her husband Deepak Kochhar. All the three investigations need not be done in parallel. Instead, their resources and information may be harvested to complete the exercise expeditiously and punish the guilty. Kochhar need not be spared if it is proved that she misused her position to sew up questionable deals.
Unfortunately, the ICICI Bank board had not taken seriously the revelations made by a whistle-blower. That could possibly have been due to Kochhar’s stature in the organisation. The deal between Deepak Kochhar’s NuPower and Venugopal Dhoot’s Supreme Energy with Rs 64 crore changing hands was ignored by the bank’s top decision-making body while reposing confidence in Chanda Kochhar only a few days back. That apart, the board came out strongly in favour of their managing director and termed the charges against her as “malicious and unfounded”.
The comparison with Audi is instructive. The company set aside funds worth over $30 billion to settle claims from consumers and other stakeholders in the Audi brand. In ICICI’s case, it went into a huddle to sing praises to Kochhar’s leadership ignoring information offered by the whistle-blower. Till prime minister Narendra Modi and finance minister Arun Jaitley were approached with vital information, ICICI Bank had not moved against the Kochhars. The bank also seems to have done precious little to instil confidence in small account holders, business associates, corporate clients and other stakeholders on the integrity of its systems, and safe custody of funds worth billions of dollars.
Instead of allowing Kochhar to proceed on long leave, the board, government and banking regulator could ensured her suspension pending completion of investigation into the reported sweetheart deal with Dhoot. What is particularly intriguing is the eloquent silence that the Reserve Bank of India (RBI) has maintained to date on the ICICI Bank imbroglio. RBI cannot sit pretty seeking more powers while fraudsters reap heavily on depositors’ money.
The ICICI Bank scandal hit the headlines at a time when the Punjab National Bank (PNB) is grappling with over a $2 billion heist by Nirav Modi and his family members. Several other scams in both private and public sector banks are being probed. Unless governance at private, foreign, state-run and cooperative banks are tightened, there is every indication that the future of banking in India will be bleak. Several pertinent questions come to the fore in the context of banking frauds, especially at a time when stressed assets crossed Rs 10.82 lakh crore. For instance, have independent directors become party to cosy deals pushed by boards of banks? Should the government and RBI nominees on these boards remain silent spectators even when they spot something amiss? Is there an alternative way to deal with frauds committed at the highest level with full knowledge of all concerned? Despondency may not lead to corrective measures. Collective conscience of the nation will.