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ICICI Bank faces risk of class action suit in US: Broking entity Jefferies

Indian investigative agencies are probing alleged links between the bank's chief executive officer, Chanda Kochhar, and the Videocon group

Abhijit Lele  |  Mumbai 

ICICI Bank plans IPO of broking arm

and its management run the risk of a class action suit in the of America (USA) if charges of wrongdoing in giving loans are established, according to US broking entity Jefferies.

Indian investigative agencies are probing alleged links between the bank's chief executive officer, Chanda Kochhar, and the

There are charges of corruption and a possible nexus between chairman and Chanda Kochhar’s husband, ICICI has said these are “malicious and unfounded” and denied any favouring by Kochhar of the conglomerate.

Nilanjan Karfa and Harshit Toshniwal, equity analysts with Jefferies, say in a research note that emerging risks for the bank could be a formal corruption charge, a possible class action suit and a costly settlement. American Depository Receipts (ADRs) are about 24 per cent of all shares at ICICI, says the note.

A class action suit is legal action brought by one or more persons on behalf of themselves and a much larger group, all with the grounds for action.

In a statement last week, the bank’s board of directors said there was “no question of any quid pro quo/ nepotism/conflict of interest” in lending decisions. No single executive had the ability to influence credit decisions. The board and its chairman had expressed confidence in the chief executive.

First Published: Thu, April 05 2018. 02:27 IST
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