ICICI Bank's laughable statement

ICICI Bank's Board has said, "In line with the highest levels of governance and corporate standards, Ms. Chanda Kochhar has decided to go on leave till the completion of the enquiry as announced on May 30, 2018.
The Board has noted and accepted this."

This is indeed funny. The Board continues to be servile to the bank's MD & CEO. Chanda Kochhar has suddenly discovered that there is something like governance and corporate standards.

The Board has lost an opportunity to prove its undying loyalty to Chanda Kochhar by refusing her 'offer' to go on leave. The Board must have responded by reminding her that the bank cannot survive without her at the helm. 

Cost of defending Chanda Kochhar

ICICI Bank continues to pay a heavy price because of its crude attempts to defend its MD. M.K.Sharma whose reputation was uncompromised till he gave (or was forced to give) a clean chit to Chanda Kochhar, is reported to have decided not to seek another term as non-executive Chairman after his present term expires on June 30th.

The Board (or should we say Chanda Kochhar) is actively looking for his replacement. A newly appointed Director, M.D.Mallya seems to be the most likely replacement. This also raises suspicion as to why he was taken in as a Director. Was the intent to make him the Chairman? Is there an undisclosed motive in the recent appointments of Radhakrishnan Nair and M.D.Mallya as 'independent' directors?

The Economic Times reports that many reputed industrialists and former bankers have declined to join the ICICI Bank Board because of the controversy surrounding Kochhar. Is she indispensable to the bank? Is it worth sacrificing governance norms and forgoing services of eminent possible directors in order to enable a person to sustain her position in the bank?

ICICI Bank ought to know that it is an international bank and therefore ethical standards expected of it are way above what we expect from a sole-proprietorship enterprise.

Power of ICICI Bank

ICICI Bank is among the largest private sector banks in India. Its influence in government and related circles seems to be strong and toxic. The Indian Express has reported that all newly-appointed members of BBB barring one have connections with this bank.

Recently in the first week of May, one Mr. Radhakrishnan Nair was appointed by the bank as an additional Independent Director. It remains moot if this was done after coming to know that SEBI was about to question the bank regarding recent developments. Mr.Nair had earlier worked as an Executive Director in SEBI. Wheels within wheels?

Reports suggesting that Chanda Kochhar has been advised by the Board to go on leave created hopes that the bank was perhaps not all that averse to adherence to principles of governance. These incipient hopes were dashed when the bank clarified that the Board has not tendered any such advice. We should have been wiser. How would the Board which is a convenient creation of the MD ask its creator to go on leave? Indications are that we have not yet heard the worst about the bank.