The management and the board of directors of the country's second largest bank, ICICI Bank Limited appeared cornered when the shareholders raised serious concerns on the reputational and financial risk looming on the Bank following dismal corporate governance condition.
At the 24th Annual General Meeting of the Bank held in Vadodara on Wednesday, the shareholders expressed disappointment over the performance of the Directors in general and the Managing Director and CEO, Chanda Kochhar in particular.
After the announcement of the day's business and the Agenda of the AGM, which was followed by an Audio-Visual presentation on the performance of the Bank, the shareholders were asked to share their views on the bank's performance. To which, a shareholder named Sunil Hemnani raised serious objection to the 'disappointing' corporate governance from senior management despite being 'rewarded' with 'American-like' perks.
"The Bank's overall growth for the past five years has been 6.5 per cent, which is slowest by private bank's standards. The salaries are comparable to American perks, yet the American corporate governance doesn't come. There is a need for serious introspection. We don't find accountability," said Sunil Hemnani.
However, at the onset of the AGM, the non-executive chairman, Girish Chandra Chaturvedi had requested the members to restrict their discussions to the topics pertaining to the AGM notice, and also clarified that the matters relating to the MD & CEO being currently under investigation, wherein a final report is awaited, it would be premature for the bank to comment on it.
Investigation
Yet, there were demands for Kochhar's presence as some of the shareholders tried to shout slogans alleging corruption in the bank. Kochhar is on leave pending an independent investigation by retired Supreme Court judge, Justice B N Srikrishna, into allegations of irregularities in sanctioning loans.
There were shareholders from Mumbai and other cities specially visiting for the AGM, and expressed disappointment at the decision of the Board of directors to re-appoint Kochhar as a director on the board of ICICI Securities.
Heartburn
Shareholders also expressed their heartburn for lower-than-expected dividend declared by the Bank at Rs 1.5 per share. The management responded to the shareholders with an assurance of best governance practices at the Bank from here onwards.
Addressing the gathering of shareholders newly appointed Chief Operating Officer (COO), Sandeep Bakhshi, admitted corporate governance issues in the past and with that objective the board collectively decided to appoint justice Srikrishna for the investigation. "We should wait for the outcome. In the meanwhile, I can assure the shareholders that we have ring-fenced the bank functioning from this event and as a bank, we are putting a best foot forward and maximise the opportunity and serve the society with the highest standards of governance. We assure you that every step taken by us would be to put our bank in a logical position in the ecosystem," said Bakhshi.
He further highlighted the silver-lining in the economy and stated that the economy is returning to its revival. "Across sector, services, agri, industry and corporate they are making a comeback. We have had a challenge with the NPA in the ecosystem but I am happy to tell our shareholders that we are at the tail end," he added.
SEBI
Bakhshi also clarified that there was no order or penalty from the SEBI. "There was a show-cause notice and the matter is pending adjudication," he said adding that regarding Kochhar's appointment at ICICI Securities, "the MD & CEO is on leave pending investigation and is not attending office of the bank or its subsidiaries. It would not be appropriate on behalf of the board to pre-judge anything pending investigation against her."
He also clarified about the US SEC action on Bank, saying, "There is no SEC fine on the Bank.
On the sidelines of the AGM
- A 'fan' shareholder forces Sandeep Bakhshi to leave the chair and get a 'click' with him.
- A decades-old shareholder of ICICI Bank keeps high hopes from 'senior brains' in the bank.
- Some senior citizen shareholders upset over absence of Chanda Kochhar. Slogans raised raised against Kochhar and husband Deepak Kochhar alleging corruption in the Bank.
- Shareholders demand more dividend as Rs 1.5 is 'unexpectedly low'. "Shareholders pay the price for Videocon case."
- Objection of Kochhar's re-appointment as Director in ICICI Securities.
- Central tone revolved around serious gaps in corporate governance and lack of accountability from the management.
- Suggestions pour in to re-look at the DNA and strengthen vigilance.
- "Bank management good at taking American-like perks but lack on American-like governance."
- Angry shareholders give 'poor' evaluation to Kochhar's performance.
- Suspicion expressed on Board's independent functioning. "Kochhar was given clean chit by Board in 15 mins, while agencies are taking over 2 months to arrive at a conclusion.
- Shareholders hold Kochhar responsible for the "mess". - Investors raise issues and red-flags risk areas in the balance-sheet on advances.
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