ICICI Securities shareholders will vote on ICICI Bank MD & CEO Chanda Kochhar's candidature as a director at the annual general meeting in Mumbai on Thursday. The resolution comes in the face of the conflict of interest for clearing loans to Videocon group which, in turn, invested in Nupower Renewables, a firm owned by Kochhar’s husband, Deepak Kochhar. The allegations are being investigated by Sebi, the CBI and the I-T department. Here are some proxy firms’ recommendations:
Glass Lewis: Vote: AGAINST
"There are significant legal and regulatory issues involving the company's non-executive chair nominee Chanda Kochhar. We believe shareholders should be 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. While the issues pertain to the parent company, ICICI Bank, 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. Given the severity of issues confronting Kochhar, we do not believe shareholders should support her candidacy.”
IiAS: Vote: AGAINST
“Kochhar’s presence on the board of ICICI Securities, while legally compliant, exposes the company to the same risks and the possibility of legal and regulatory sanctions. We believe she should be reappointed on the board only after all the charges have been cleared.”
SES: Vote: FOR
"Kochhar’s appointment is compliant with law and no concern has been identified in the profile, attendance, performance and time commitment of Kochhar.”
With ICICI Bank having80 per cent stake in ICICI Securities, analysts expect smooth passage for the resolution. But the ICICI Securities shareholders, meanwhile, are a jittery lot as they have lost 36 per cent of their investment since its listing in April. Another ICICI group firm, ICICI Prudential Mutual Fund is also facing the stock market regulator bailing out ICICI Securities IPO with unitholders’ money.
A ICICI Prudential MF spokesperson said the fund has complied with SEBI’s advice and addressed the matter to their satisfaction. This was after ICICI Prudential Mutual Fund credited back to the five schemes that had invested Rs 2.4 billion in ICICI Securities on the last day of the latter’s Initial Public Offer (IPO) of equity to bailout the issue. The fund house had to sell Rs 2.4 bn worth of shares and the final amount was credited back to the schemes after adjusting for the movement in share price from the issue price. The fund has taken a hit of Rs 1 billion due to the sale.