In a recent development in the case of Chanda Kochhar versus ICICI Bank, the former CEO has sought permission from the Bombay High Court to amend her petition in view of the reply given by the bank to the court. Kochhar had earlier (30th November) moved the court challenging her termination and subsequent clawback of bonuses and remuneration including stock options. The court has granted Kochhar and her counsel time till 9th December to amend their petition challenging her termination by the private sector bank on the basis of the reply submitted by the bank.
During the case hearing on 2nd December, advocate Darius Khambata argued before the court on behalf of the bank that Reserve Bank of India (RBI) had approved Kochhar’s termination post-facto (after the fact). The bank also submitted the approval letter before the court. ICICI bank also challenged the maintainability of Kochhar’s writ petition, considering that ICICI bank was a private bank and the termination was a contractual issue. Appearing on behalf of Kochhar, senior counsel Vikram Nankani and Sujay Kuntawala stated in their petition that ICICI Bank had obtained ‘post-facto’ approval for her termination from RBI, which was in contravention to the law on grounds that it did not have the previous approval letter as Section 35B of the Banking Regulation Act, 1949, prior approval of the RBI is mandatory before terminating the Managing Director.
Chanda Kochhar, had quit her role as MD and CEO at ICICI Bank in October 2018, following allegations and investigation related to irregularities in grant of loans and related procedural lapses. She sought an early retirement, which was accepted by the board with effect from 4th October 2018. However, post the board meeting conducted on 30th January 2019, after receipt of the Srikrishna probe report, the bank had said in its statement that it will treat – “the separation of Kochhar from the bank as a ‘termination for cause’ under the bank’s internal policies, schemes and the code of conduct, with all the attendant consequences”.
As a result, all her existing and future entitlements as per the employment contract – including any unpaid bonuses, increments, unvested, vested stock options, and benefits were revoked. The bank also initiated steps for “clawback of all bonuses paid to her between April 2009 and March 2018, and to take such further actions as may be warranted in the matter”. As per the bank statement, the report concluded, “that Ms. Chanda Kochhar was in violation of the ICICI Bank Code of Conduct, its framework for dealing with conflict of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.”