MUMBAI, APR 19
Harried mutual fund (MF) houses, which have a huge exposure to ICICI Bank, have met non-executive chairman M K Sharma after a litany of allegations surfaced against the lender’s MD & CEO Chanda Kochhar. The MF executives discussed all issues, including succession planning, according to a source. “There have been meetings between Sharma and the mutual fund houses to assuage their concerns. The issue of succession plan was also discussed in the event of Kochhar stepping down,” a bank source said.
According to market data, the fund houses have over Rs 30,000-crore exposure to the second largest private sector bank in the country, making it the second-most fund-bought lender in the country. Domestic and global institutions and fund houses own more than 72% of the bank.
At the several meetings, which began earlier this month, Sharma is understood to have allayed fears of a management vacuum since the bank has a strong pool of second-rung leaders after Kochhar. It can be noted that the ICICI Bank scrip has taken a severe beating following the allegations of conflict of interest against Kochhar, which surfaced in late March.
The allegations are mainly around the lender extending over Rs 3,250 crore to the now bankrupt Videocon before the bank CEO’s husband Deepak Kochhar bought out the troubled group’s promoters Dhoots from the green energy firm NuPower in the early 2012.
The bank’s board came out with a statement on March 28 supporting Kochhar, but there have been reports later of there existing some divisions with non-executive directors, especially the ones appointed by the government or state-run entities, having a differing view.
Earlier, Sharma said that Kochhar did not recuse herself from a meeting to decide on a loan to an entity where her husband was a shareholder at some point of time. Global ratings agency Fitch had raised concerns over the bank’s corporate governance practices following the revelations.
The meetings also assume significance in view of rival Axis Bank deciding to shorten the tenure of its chief executive Shikha Sharma to just about seven months from a fourth three-year ter m after the RBI reportedly raised concerns about dud assets management during her tenure.
MUMBAI, APR 19