ICICI Bank votes for Kochhar's reappointment to ICICI Securities board

Chanda Kochhar is currently under investigation for charges of conflict of interest over a loan given to the Videocon group, which had business dealings with her husband

The Kishinchand Chellaram College, usually bustling with students, resembled a heavily-guarded fort ahead of the annual general meeting (AGM) of ICICI Securities on Thursday. Here, shareholders were to decide whether Chanda Kochhar should continue to serve on the board of the broking and investment banking firm. 

Chairperson of ICICI Securities, Kochhar — currently on leave amid an on-going probe in the Videocon loan case — gave the AGM a miss but her position remained intact. 

According to the voting pattern shared on the exchanges, 95.78 per cent of the shareholders’ votes were in favour of Kochhar’s reappointment. 

All the promoter and promoter group shareholders voted for her reappointment, while only 2.27 per cent votes were against it. 

At least two proxy firms had advised investors to vote 'against' the resolution, saying it would expose the company to possible regulatory sanctions.

Kochhar is under investigation on a charge of conflict of interest over a loan by the bank to the Videocon group, which had business dealings with her husband, Deepak Kochhar.

US-based proxy firm Glass Lewis had recommended to ICICI Securities' shareholders to vote against the proposal. "There are significant legal and regulatory issues involving the ICICI Securities non-executive chair nominee Chanda Kochhar. We believe shareholders should be very concerned about the matters facing Kochhar, which includes her being forced to take a leave of absence from the ICICI Bank board, pending the outcome of the investigation into her conduct," it had said.

 "Further, the mere fact that she has been forced to take leave may be representative of serious lapses of governance issues that carry reputational risk issues which may negatively impact the company... we do not believe shareholders should support her candidacy at this time."

During the two-hour meeting, most ordinary shareholders underscored their concerns on a sharp fall in ICICI Securities' share price. They urged management to use its 'cash-rich' book to issue bonus shares. 

Most of those were seen voicing their displeasure over the absence of Kochhar.  Kishorechandra J Panchal,75, who said he voted against her re-appointment, said he would have wanted to express his disappointment over the allegations against her. 

"There were much more serious issues that the shareholders could have touched upon, instead of just praising the management," said S K Patel, vice-president of Bombay Shareholders' Association, who left the early without voting. He said he didn't expect any change from his vote.

This was ICICI Securities first AGM after its listing in April. The shares have lost over a third of their value. Besides the weak listing, the company has also been in news over participation of group firm ICICI Prudential Mutual Fund in its IPO. The fund house recently had to divest part of its holding in ICICI Securities to compensate unit holders, following a diktat by the Securities and Exchange Board of India.