Tuesday, May 11

Chanda Kochhar moves High Court against ICICI Bank over termination

MUMBAI: Former ICICI Bank chief executive, Chanda Kochhar, has moved the Bombay High Court against her ex-employer for terminating her when the bank had accepted her request for an early retirement.

Kochhar, one of India’s most prominent woman CEOs, said that Sandeep Bakshi was named her successor only after ICICI Bank had accepted her request for an early retirement.

She pointed out that her retirement request was accepted by the bank in October 2018 and in February 2019, the bank issued her a termination letter. Kochhar, in her petition, has challenged the ‘purported termination’ and denial of the agreed remuneration, said two people familiar with the development. ICICI Bank didn’t respond to ET’s mailed queries.

Kochhar has termed her termination “illegal, untenable, and unsustainable in law”, and has sought the court’s intervention.

The division bench of Justice Ranjit More and Justice MS Karnik has posted the matter for hearing on December 2.

“She (Kochhar) has filed a writ petition against the bank for terminating her service without prior approval from the Reserve Bank of India (RBI) in breach of a statutory obligation,” said one of the people cited above. “The bank took this step after having accepted her request for early retirement with effect from October 4, 2018, by the board of the bank.”

According to the plea filed by the former ICICI Bank chief executive, on November 3, 2018, Kochhar had requested early retirement and the request was accepted by the board of directors of ICICI Bank.

However, on January 30, ICICI Bank’s chief human resources officer (CHRO) conveyed her a message that he had been directed by the board to inform her that following receipt of the enquiry report from retired justice BN Srikrishna and due consideration of the enquiry report, the board decided to treat her separation from the bank as ‘termination for cause’ under the bank’s internal policies, schemes and the code of conduct. The termination also required clawback of all bonus payments made from April 209 to March 2018.

“The respondent’s (ICICI Bank) CHRO claimed that as per the records of the respondent, an aggregate of Rs 7.4 crore is paid to the petitioner (Kochhar) as bonus during the period,” said the petition. “The letter further reiterated that early retirement benefits given to the petitioner stand revoked.”

Senior counsels Vikram Nankani and Sujay Kantawala are representing Kochhar in the case, while ICICI Bank is being represented by senior counsel Darius Khambata and law firm Veritas Legal.

In January, ICICI Bank’s internal inquiry found that Chanda Kochhar had violated disclosure norms on conflict of interest, and that her October 2018 exit would not be treated as normal resignation but as dismissal, the board had said.

The bank said it would also seek to claw back bonuses handed out during her tenure as CEO, and she were to lose all dues and stock options for which she otherwise would have been eligible.

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