Chanda Kochhar

MUMBAI: ICICI Bank CEO Chanda Kochhar's move out of the corner office on Monday to facilitate an investigation into the alleged "conflict of interest" charges- where her husband was the beneficiary of loans from the bank's borrowers- was the culmination of a series of events. However, despite its inevitability, her 'leave of absence' was preceded by high drama that saw Kochhar adopting a belligerent stance.

Although investigations by authorities have been regularly reported in the media, the bank's board had not revised its earlier statement voicing support for Kochhar. Also, in several earlier board meetings, the government's representative was absent, leading to an impression that it was keeping off the controversy. This view was supported by finance minister Piyush Goyal 's statement that law would take its own course.

The turning point, however, came on May 30 in a board meeting when the directors decided to appoint an external investigator. When Justice BN Srikrishna was chosen to head the inquiry, it was clear that things were going to be different. For one, MK Sharma, who had earlier been supportive of Kochhar, now asked board members whether the CEO should be asked to go on leave pending inquiry.

For Kochhar, who went on her annual leave on June 1, the writing was on the wall. The board proposed to bring in Sandeep Bakhshi , who had been number two at the bank a decade ago, as chief operating officer. It was against this backdrop that the June 18 board meeting commenced.

Kochhar, who had just returned from her leave, is understood to have taken an aggressive stand at the meeting.

She questioned why she was being asked to go on leave as none of the regulators had asked for it.

But when the chairman of the bank's largest shareholder, LIC, insisted on the course of action, it was clear that Kochhar had little choice. While she continued to resist, all the independent directors of the bank are understood to have dug in their heels in the matter.

Kochhar is understood to have left the room in a huff and had to be persuaded to return. The board subsequently drafted a statement that it was a collective decision to ask Kochhar to go on leave. However, she is believed to have insisted that she would not accept such a statement.

Finally a consensus statement was drafted: "In line with the highest levels of governance and corporate standards, Chanda Kochhar has decided to go on leave till the completion of the enquiry as announced on May 30, 2018".

