Proxy firms differ on Kochhar's re-appointment at ICICI Securities

India’s leading proxy firms have opposing views on the possible re-appointment of Chanda Kochhar as the director on the board of ICICI Securities, the broking arm of ICICI Bank.

In a notice for its annual general meeting (AGM) on August 30, ICICI Securities, which listed this fiscal, has proposed a resolution to reappoint Kochhar as a director on its board.

Institutional Investor Advisory Services (IiAS) had recommended investors to vote ‘against’ the proposal even as Stakeholders Empowerment Services (SES) asked investors to vote ‘for’ it.

“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 against her have been cleared,” said IiAS in a note.

Kochhar, MD & CEO of ICICI Bank, is currently under scrutiny for her role in extending loans to the Videocon group, a conflicted party. ICICI Bank has initiated an independent enquiry into various claims made by a whistleblower.

Kochhar is currently on a leave of absence pending the outcome of the inquiry. Market regulator Securities and Exchange Board of India (Sebi) too has issued a showcause notice to Kochhar and ICICI Bank over alleged violation of disclosure norms.

Also, in a recent filing with US market regulator SEC, ICICI Bank highlighted the possibility of increased regulatory scrutiny and reputational risks from these developments impacting its operations and financial performance.

SES has said Kochhar’s “appointment is compliant with law and no concern has been identified in the profile, attendance performance and time commitment of Kochhar.”

An official at SES said so far there have only been allegations against Kochhar and no regulatory action have been taken.

SES, however, has recommended voting ‘against’ some other resolutions floated by ICICI Securities pertaining to employee stock option plans (ESOP), citing non-disclosure of exercise price.