Icici's Scandal: hit Kochhar quits as CEO, Bakhshi gets top job (updated)

Videocon Industries (India)

04/10/2018 10:15

* Bakhshi has been interim CEO since June
    * Move removes element of uncertainty, positive for stock
-analyst
    * ICICI shares gain 5.8 percent after announcement
    * Probe into alleged conflict of interest unaffected

 (Adds analyst comments, background; updates shares)
    By Abhirup Roy and Krishna V Kurup
    MUMBAI/BENGALURU, Oct 4 (Reuters) - ICICI Bank Ltd  ICBK.NS 
chief Chanda Kochhar, who has been mired in controversy for
months, resigned on Thursday after seeking an early retirement
and will be replaced by Sandeep Bakhshi, the Indian private
lender said.
    Kochhar is the third high-profile woman banker in India to
step down in recent months, following Arundhati Bhattacharya who
retired from the State Bank of India  SBI.NS  a year ago and
Shikha Sharma who is set to exit after almost ten years atop
Axis Bank  AXBK.NS  in December.  urn:newsml:reuters.com:*:nL4N1TL1WY
    Her exit also comes at a time when the banking regulator,
the Reserve Bank of India (RBI), is driving a push for better
governance and leadership changes at lenders that have racked up
some $150 billion in bad loans.  urn:newsml:reuters.com:*:nL8N1WH1NX urn:newsml:reuters.com:*:nL3N1W724B 
    "There is now additional pressure from RBI to show that
banks are better governed," said Shriram Subramanian, founder of
proxy advisory firm InGovern.
    ICICI has been in the grips of a controversy for months over
allegations that Kochhar had favoured Videocon  VEDI.NS , a
consumer electronics and oil and gas exploration company, in the
bank's lending practices. Videocon's founders had an investment
in a renewable energy company founded by Kochhar's husband.
    Bakhshi, the former head of ICICI's life insurance arm, took
the helm of the bank on an interim basis in June, after Kochhar
went on leave pending the completion of a probe into the alleged
conflict of interest.  urn:newsml:reuters.com:*:nL4N1TK3VV 
    The bank said the "inquiry instituted by the board will
remain unaffected" by Kochhar's exit, adding that some of her
benefits would be subject to the outcome of the probe. 
    The board had initially backed Kochhar, calling the nepotism
allegations against her "malicious and unfounded", but later
instituted the probe into the matter in June.  urn:newsml:reuters.com:*:nL4N1TK3VV      
    ICICI shares rallied as much as 5.8 percent after Bakhshi
was confirmed as CEO for a five-year term on Thursday. 
    "This removes the element of uncertainty and will be
positive for the stock," R. Sreesankar, co-head, institutional
equities at Indian brokerage firm Prabhudas Lilladher, said. 
    Kochhar, 56, had headed ICICI, India's third-largest lender
by assets, since May 2009. She is also stepping down from the
board of directors of the bank's units, ICICI said. 

 (Reporting by Abhirup Roy in Mumbai and Krishna V Kurup in
Bengaluru; Editing by Clarence Fernandez and Himani Sarkar)
 ((Krishna.VKurup@thomsonreuters.com; +91 80 6749 1310; Reuters
Messaging: Krishna.VKurup.thomsonreuters.com@reuters.net;))