The case “Rise and Fall of Chanda Kochhar” looks at the series of allegations against ICICI Bank’s former MD and CEO Chanda Kochhar (Kochhar) that eventually led to her unceremonious exit from the bank after an illustrious career of 34 years. Kochhar joined ICICI Limited in 1984 and played an important role in establishing ICICI Bank during the 1990s. She served as head of infrastructure finance and corporate banking business during the period. Kochhar became a member of the Board of Directors of ICICI Bank in 2001. She led the bank’s corporate and international banking businesses during 2005-07. The bank promoted her to Joint Managing Director and Chief Financial Officer in 2007. Kochhar was promoted to the top position at ICICI Bank as Managing Director and CEO in 2009. She oversaw the bank’s operations in India and abroad. She also chaired the boards of most of the bank’s principal subsidiaries.

In 2016, Kochhar came under the lens of multiple revenue and law enforcement agencies after allegations of corruption and misconduct surfaced against her, beginning with a complaint from Arvind Gupta (Gupta), an investor in both ICICI Bank and the Videocon Group. Gupta sought an inquiry into the dealings between Kochhar’s husband Deepak Kochhar (Deepak) and Videocon Group promoter Venugopal Dhoot (Dhoot). The allegation came into the limelight in April 2018 with an investigation by The Indian Express confirming a web of transactions between Deepak and Dhoot. Initially, the ICICI Bank’s Board of Directors gave Kochhar a clean chit. Following a whistleblower’s complaint and a letter written by Deepak to the Board confirming his dealings with Dhoot, the bank’s board set up an enquiry committee under B. N. Srikrishna. Amidst the allegations, Kochhar resigned as CEO and exited the Board of Directors of ICICI Bank's subsidiaries in October 2018, much before the bank received the Enquiry Report from B. N. Srikrishna. Following the receipt of the Enquiry Report on January 30, 2019, the Board of Directors of ICICI Bank treated the separation of Kochhar as a ‘Termination for Cause’ under the Bank’s internal policies, schemes, and Code of Conduct, with all attendant consequences, including revocation of all her existing and future entitlements.

The Income Tax department, the Serious Fraud Investigation Office, the Central Bureau of Investigation and the Directorate of Enforcement also sought details of the loans disbursed during Kochhar’s tenure as MD and CEO and sought the bank’s response on the alleged non-compliance with disclosure norms in dealings with the Videocon Group. Kochhar denied the allegations and said that she and her husband Deepak did not share any business details with each other and that she was not aware of his clients. She admitted to the Board that she had come to know about her husband’s business dealings only later. She also stated that the loan given to Videocon was based purely on merit. She later challenged the bank’s decision to treat her separation as a termination rather than as a resignation.

Human Resource and Organization Behavior Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

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Issues

The case is structured to achieve the following teaching objectives:

	Gain knowledge on types of power in an organization.
	Understand how leadership and power need to be clearly separated from each other.
	Understand the different circumstances in an organization that lead to conflict of interest.
	Learn about the compliance challenges of the Board of Directors of an organization.
	Understand the importance of whistleblowers in Corporate Governance.

Contents

INTRODUCTION

BACKGROUND

THE INITIAL ALLEGATIONS

INVESTIGATION INTO THE ALLEGATIONS

ICICI BANK INITIATES CODE OF CONDUCT VIOLATION

WHAT NEXT?

EXHIBITS

Keywords

ICICI Bank, Chanda Kochhar, Conflict of Interest, Videocon Group, Venugopal Dhoot, Types of Power Corporate Governance, Whistleblower, Code of Conduct, Fiduciary duty, Annual Disclosures"

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