Chanda Kochhar: A superstar CEO turned Fraudster

There are people we idolize, we put them on a pedestal, they are the epitome of success and their achievements are raved about in top corporate magazines and business dailies. As Indians our hearts swell with pride when we think of what they have achieved and the glory that they have brought to the nation. Any young person growing up eulogies them and want to follow their footsteps. They are an inspiration to many. Youngsters want to emulate their feat but all those dreams are shattered if you come to know that these iconic figures are fraudsters who have misused their position to embezzle funds. Even though they reached the pinnacle of corporate glory but their deeds are not worthy of the position they hold. Albeit reaching the acme of success their lust for money and nepotism didn’t stop. How can people who are role models for millions stoop so low? It is incredulous, case of Chanda Kochhar in point

She had everything a woman could dream off, a super star CEO, talismanic banker of Indian financial sector, a CEO par excellence, she was making more money than all her counterparts and was the face of ICICI in India and abroad. It sends jitters down my spine to imagine such a superstar CEO could indulge in such a bizarre episode to embezzle the funds to fill into her husband’s coffers.

As CEO of the largest private bank in the country she could have developed ICICI into a model of corporate governance but on the contrary she ran ICICI like her fiefdom with blatant regard for corporate Governance rules. A clear case of conflict of interest has come to light wherein she led consortium of bankers which approved the loan to the tune of Rs. 40000/- crores out of which Rs. 3250 crores were alloted by ICICI bank to V.N Dhoot towards his Oil & Gas venture which has now become NPA. Videocon group wanted to venture into Oil & Gas business which is a high risk business and sought a loan of Rs. 40000/- crores from consortium of bankers and Chanda Kochhar was in that team.

But after sanctioning of this loan some surreptious transactions have come under the radar of investigating agencies. Venugopal Dhoot transferred money from Videocon Group to Supreme Energy, in which he had 90 percent shares. He later transferred his shares to Deepak Kochhar. Deepak Kochhar subsequently transferred his shareholdings to Pinnacle Energy. Pinnacle Energy was a trust formed by Kochhar family. This is a clear case of siphoning off the money via a circuitous route to fill their own coffers.

The is an another report which explicitly mentions about the relationship between the two families. It was a longstanding one that began even before Chanda Kochhar became the CEO of ICICI Bank in 2009. The Kochhars’ residence at CCI Chambers, opposite the Cricket Club of India in south Mumbai, is said to have been bought from the Videocon Group in a complex transaction in the mid-1990s. The apartment was purchased through Credential Finance, a financial services firm established by Deepak Kochhar, Chanda Kochhar’s husband, and his brother Rajiv Kochhar.

So what it that bedevils Indian corporate sector:

In India it is a mandatory compulsion for people in position of power to oblige their relatives. Rajeev Kochhar, brother in law of Chanda Kochhar was often seen in the corporate office of ICICI bank. It was an open secret that processing of all loans was done thru Rajeev Kochhar even though he has not holding any position at ICICI.

Chanda Kochar was CEO of ICICI bank since last 2009 and she started deporting as if she is the queen of ICICI bank and started treating the bank like her fiefdom. In the present case she should have refrained from being the member of the committee as there was a clear case of conflict of interest.

There were other members in the committee which disbursed the loan to Dhoot, some of those members should have raised objections when such shady transactions were taking place. All committee members have a role to play when loan applications come for approval but such was the clout of the superstar CEO that nobody dared to question her.

Whenever any decision is taken by a committee it is a collective responsibility of all the team members and not only the decision of the head of the committee or the superstar CEO who wields her power to wade thru.

When a superstar CEO starts dictating her own term, role of other senior board members becomes of paramount importance. Decisions should be taken based on the merit of the case and not just on the personality of the bigwig who is pushing for the case. Our top bosses, CEO pay mere lip service to the clause of conflict of interest.

Scam after scam has eroded the credibility of top Indian banks and Indian customers have been unnerved by what has happened over past few years and it has set the alarm bells ringing, now the onus is on us to set our house in order else we shall be left groping in this VUCA world. There is a silver lining to every dark cloud and in this case there is an opportunity for us to set our house in order and come out wiser from all these scams.

Government should not give its agencies a free reign to prosecute top honchos. Morale of our top entrepreneurs is already at an all-time low, this chest thumping of sending everyone to incarceration has to stop somewhere as anyone will feel it’s better not to start a venture than to go to Jail. It’s better not to give loan rather than going to Jail. With these efforts we might clean our systems but it shall surely hamper growth and further aggravate joblessness in the country.There is no panacea or silver bullet to treat all these ills, the only way forward is learn from these cases and move ahead.

Author: Siddhartha Dua

Disclaimer: Views expressed are personal and writer does not vouch for the authenticity of the facts.

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