Not kosher: on Chanda Kochhar case

 

 

 

Not kosher: on Chanda Kochhar case

The Chanda Kochhar case raises issues of corporate governance that go well beyond her
The inquiry by former Supreme Court judge Justice B.N. Srikrishna into the allegations(आरोपों/अभियोग) against former ICICI Bank CEO Chanda Kochhar has taken eight long months to confirm(पुष्टि करना) what seems apparent(स्पष्ट/प्रत्यक्ष) – that she did not conduct(व्यवहार/आचरण) herself as she should have in relation to conflict(संघर्ष /टकराव)-of-interest issues. It was only last week that the Central Bureau of Investigation(जाँच पड़ताल) filed an FIR against Ms. Kochhar, her husband Deepak Kochhar, head of the Videocon group Venugopal Dhoot and ICICI Bank executives(अधिकारी) for sanction(मंजूरी/प्रतिबंध) of credit facilities(सुविधाएं) in violation(उल्लंघन ) of rules, that caused(वजह/कारण बनना) a loss of ₹1,730 crore to the bank. The investigating agency has a long way to go before it establishes(स्थापित करता/सिद्ध करना) whether the loans were given in return for financial favours(एहसान), a charge that is at the heart of booking them for criminal(आपराधिक ) conspiracy(साजिश/षड्यंत्र), cheating and corruption(भ्रष्टाचार/दूषण). But clearly, Ms. Kochhar erred, and badly at that, in not disclosing(प्रकट करना/भेद खोलना) to the bank’s board her husband’s business connections with the Videocon group, which was a client of the bank. Worse, she failed to display the correctness(शुद्धता /यथार्थता) expected(उम्मीद ) of her by sitting on committees that sanctioned credit facilities to Videocon when she ought to have recused(अलग कर लिया/प्रयोग किया) herself. Just a day after a ₹300-crore loan was disbursed(चुकाना/व्यय करना) to Videocon International Electronics in 2009, Mr. Kochhar’s NuPower Renewables received ₹64 crore from the Videocon group. Whether this was a quid pro quo for the loan, as the CBI suggests(बताया), needs to be proved. But there is no denying(नकारना/छोड़ देना) that it made for poor, even suspicious, optics.

The inquiry report holds her guilty(दोषी/अपराधी) of violation of the bank’s “code of conduct, its framework for dealing with conflict of interest and fiduciary duties(आर्थिक ज़िम्मेदारियाँ,), and in terms of applicable Indian laws, rules and regulations.” The bank’s board has accepted the report and decided to treat her voluntary(स्वैच्छिक ) resignation from the bank in October as “termination for cause“कारण के लिए समाप्ति)”, also deciding to claw back all bonuses paid to her since April 2009, hold back unpaid amounts and divest her of her stock option(विकल्प ) entitlements(हकों). These are strong penalties(कठोर दंड), but the question is: how did the board give her a clean chit as recently as March last year? It had then reposed its full confidence and faith in Ms. Kochhar and commended(सराहना /प्रशस्त) her and the management team for their “hard work and dedication(निष्ठा/समर्पण)”. It is impossible to believe the board was not aware(अवगत/जानकार) of the allegations against the CEO given that a whistle-blower had made them public in October 2016. Was the board then influenced by Ms. Kochhar into giving her a good conduct certificate? These are uncomfortable(असुविधाजनक) questions that raise(बढ़ाना/उठाना)doubts over the standards of corporate governance at one of India’s largest banks. The ICICI Bank episode is only one among several instances of governance lapses in corporate India in recent times. Clearly, regulators need to up their game.

 

 

Important Vocabulary

1. Sanction(मंजूरी/प्रतिबंध)
Synonyms: approval, acquiescence, allowance, approbation, assent
Antonyms: denial, disagreement, disapproval, discouragement, opposition

2.Violation(उल्लंघन )
Synonyms: abuse, contravention, encroachment, infraction, infringement
Antonyms: obedience, observance

3.Allegations(आरोपों/अभियोग)
Synonyms: accusation, charge, claim, plea, statement
Antonyms: exculpation, denial

4. Conduct(व्यवहार/आचरण)
Synonyms: charge, handling, management, manipulation, oversight
Antonyms: mismanagement, disorganization, disregard, ignorance, neglect

5. Caused(वजह/कारण बनना)
Synonyms: begin, create, generate, induce, lead to
Antonyms: destroy, discourage, end, halt, prevent

6. Conspiracy(साजिश/षड्यंत्र),
Synonyms: plot, scheme, sedition, treason, cabal
Antonyms: faithfulness, honesty, ignorance, loyalty

7. Disbursed(चुकाना/व्यय करना)
Synonyms: contribute, dispense, distribute, expend, pony up
Antonyms: hold, keep, take, attach, collect

8. Denying(नकारना/छोड़ देना)
Synonyms: ban, call on, contradict, oppose, rebuff
Antonyms: OK, accept, allow, approve, ratify

9. Voluntary(स्वैच्छिक )
Synonyms: spontaneous, chosen, free, independent, volunteer
Antonyms: forced, involuntary, obligatory, unwilling

10. Dedication(निष्ठा/समर्पण)”
Synonyms: adherence, allegiance, commitment, devotion, devotedness
Antonyms: apathy, disloyalty, unfaithfulness

11. Commended(सराहना /प्रशस्त)
Synonyms: applaud, approve, compliment, endorse, extol
Antonyms: blame, censure, criticize, disapprove, oppose

12. Raise(बढ़ाना/उठाना)
Synonyms: boost, hike, increment, accession, accretion
Antonyms: decrease, decline, deduction, fall, shrinkage

13. Entitlements(हकों)
Synonyms: authorization, certificate, charter, consent, exemption
Antonyms: responsibility, denial, imprisonment, incarceration, limitation

14. Commended(सराहना /प्रशस्त)
Synonyms: applaud, approve, compliment, endorse, extol
Antonyms: blame, censure, criticize, disapprove, oppose

15. Conflict(संघर्ष /टकराव)
Synonyms: battle, clash, combat, competition, rivalry
Antonyms: peace, truce, agreement, calm, harmony

 

 

Credit To The Hindu News Paper

The Chanda Kochhar case raises issues of corporate governance that go well beyond her
The inquiry by former Supreme Court judge Justice B.N. Srikrishna into the allegations against former ICICI Bank CEO Chanda Kochhar has taken eight long months to confirm what seems apparent – that she did not conduct herself as she should have in relation to conflict-of-interest issues. It was only last week that the Central Bureau of Investigation filed an FIR against Ms. Kochhar, her husband Deepak Kochhar, head of the Videocon group Venugopal Dhoot and ICICI Bank executives for sanction of credit facilities in violation of rules, that caused a loss of ₹1,730 crore to the bank. The investigating agency has a long way to go before it establishes whether the loans were given in return for financial favours, a charge that is at the heart of booking them for criminal conspiracy, cheating and corruption. But clearly, Ms. Kochhar erred, and badly at that, in not disclosing to the bank’s board her husband’s business connections with the Videocon group, which was a client of the bank. Worse, she failed to display the correctness expected of her by sitting on committees that sanctioned credit facilities to Videocon when she ought to have recused herself. Just a day after a ₹300-crore loan was disbursed to Videocon International Electronics in 2009, Mr. Kochhar’s NuPower Renewables received ₹64 crore from the Videocon group. Whether this was a quid pro quo for the loan, as the CBI suggests, needs to be proved. But there is no denying that it made for poor, even suspicious, optics.

The inquiry report holds her guilty of violation of the bank’s “code of conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.” The bank’s board has accepted the report and decided to treat her voluntary resignation from the bank in October as “termination for cause”, also deciding to claw back all bonuses paid to her since April 2009, hold back unpaid amounts and divest her of her stock option entitlements. These are strong penalties, but the question is: how did the board give her a clean chit as recently as March last year? It had then reposed its full confidence and faith in Ms. Kochhar and commended her and the management team for their “hard work and dedication”. It is impossible to believe the board was not aware of the allegations against the CEO given that a whistle-blower had made them public in October 2016. Was the board then influenced by Ms. Kochhar into giving her a good conduct certificate? These are uncomfortable questions that raise doubts over the standards of corporate governance at one of India’s largest banks. The ICICI Bank episode is only one among several instances of governance lapses in corporate India in recent times. Clearly, regulators need to up their game.

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