Mumbai: The Securities and Exchange Board of India (Sebi) has powers to impose a penalty but not demand the resignation of ICICI Bank Ltd chief executive Chanda Kochhar if it finds she and the bank did not abide by fair disclosure norms in its ongoing probe.

A maximum penalty of ₹ 25 crore, or three times the ill-gotten gains, can be levied under Sebi rules, but in this case, the quantum of the penalty may be at the discretion of Sebi’s adjudicating officer, according to two executives familiar with the development.

“Only a financial penalty can be levied as under the current notice, there is no provision for asking the CEO to step down," said the first of the two executives, both of whom spoke on the condition of anonymity.

On 24 May, Sebi sent a notice to ICICI Bank and Kochhar, seeking clarification with regard to disclosure of price-sensitive information from the bank and the CEO allegedly not abiding by the bank’s code of conduct.

Emails sent to ICICI Bank and Sebi seeking comment on Friday went unanswered.

“The show cause to Chanda Kochhar alleges that she did not adhere to the bank’s code of conduct as far as making disclosures... Considering that the CEO’s husband (Deepak Kochhar) had a partnership with a firm owned by the promoter (Venugopal Dhoot) of Videocon group, and some of the group’s companies in turn secured loans from the bank, these disclosures should have been made as part of Sebi’s rules on LODR (Listing Obligations and Disclosure Requirements)," said the second executive.

READ: ICICI Bank CEO Chanda Kochhar asked to be on leave till probe is over

ICICI Bank managing director and CEO Kochhar can also ask for a settlement by paying a fine and without admitting to any wrongdoing, said the second executive.

“The bank can always file for consent or a settlement without admitting to any wrongdoing," this executive said.

The Economic Times on 8 June reported that ICICI Bank is looking to file a consent plea with Sebi.

Still, even a settlement with Sebi may not be enough for CEO Kochhar to complete her current five-year term, which ends in March 2019, as a reconstituted board, which has seen the entry of three new directors in the last two months, could still ask her to consider stepping down on moral grounds, according to a third executive familiar with the development.

“The onus is back on the board," said the third executive.

The complexion of ICICI Bank’s board has changed since the issue surfaced in March.

Chairman M.K. Sharma’s three-year term ends on 30 June, which means the bank will soon have a new chairman.

Sharma, who turned 71 last month, and who has been Kochhar’s most vocal supporter, cannot seek reappointment as the Reserve Bank of India bars an independent director who has turned 70 from doing so, according to the third executive cited above.

Sharma declined to offer a comment.

During the last two months, the ICICI Bank board saw the government replace its nominee, Amit Agarwal with Lok Ranjan. On 2 May, Radhakrishnan Nair was appointed an independent director for five years even as another independent director, Tushaar Shah, stepped down after eight years. On 29 May, former Bank of Baroda chairman M.D. Mallya joined the board as additional independent director.

Sebi is investigating if Kochhar had disclosed to the bank’s board about her husband, Deepak Kochhar’s partnership in a firm, NuPower. Venugopal Dhoot, the owner of Videocon group, was the second founding partner of NuPower.

Some companies of Videocon group secured $500 million in loans from ICICI Bank, along with a group of 19 other banks in April 2012.

This made some observers and whistleblower Arvind Gupta link the approval of the loans by ICICI Bank to companies of Videocon group to investments made by Dhoot in NuPower.

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