Sebi favours adjudication action against ICICI Bank, Kochhar

ICICI Bank may face a penalty of up to Rs 25 crore under the relevant Sebi regulations for such lapses, while the fine for Kochhar may go up to Rs 1 crore, besides other penal actions, a senior official said. 

The adjudication process will start formally soon after taking into account the replies to the show cause notices issued by Sebi to ICICI Bank, Kochhar and others in this matter, the official added. 

According to an ICICI Bank spokesperson, the bank and its MD received show cause notice seeking a response as to why an inquiry should not be held against them under the Securities Contracts (Regulation) Rules.  

“Documents relied upon under the notice have been received today. Appropriate response to the show cause notice after seeking legal advice would be submitted within the timeline provided,” the spokesperson said.  Besides Sebi probe, ICICI Bank’s board has also constituted an “independent enquiry” and Kochhar has gone on leave till completion of this enquiry.  

Kochhar will continue as MD and CEO, though the group’s life insurance arm head Sandeep Bakhshi has been appointed as a whole-time director and COO. 

Bakhshi will report to Kochhar and will handle the day-today operations in her absence. 

The bank has maintained that its board has full faith in Kochhar. Sebi’s preliminary examination findings are based on enquiries made by the regulator in the matter involving Kochhar, ICICI Bank and Videocon Group. 

As per the report, Kochhar has admitted that her husband Deepak Kochhar has had many dealings with Videocon Group over the last several years. Besides, it has also been admitted by her that Deepak Kochhar and Venugopal Dhoot were co-founders and promoters of NuPower. 

Further, in June 2009, shares of  Dhoot and Pacific Capital (owned by Deepak Kochhar’s father and sister-inlaw) in NuPower were sold to Supreme Energy. Also, Dhoot continues to hold interest in NuPower through debentures of Rs 64 crore, subscribed through Supreme Energy, the regulator found.