ICICI Bank board begins search for new chairman

MUMBAI: The board of ICICI Bank has begun looking for a new chairman as the term of the incumbent, MK Sharma, expires at the end of this month and he may not want a second term. Veteran banker and former Bank of Baroda chairman and managing director MD Mallya is the frontrunner to succeed Sharma, two people aware of the development said. Mallya was appointed to the ICICI Bank board on May 29.

“The ICICI Bank board was of the opinion that the bank needs a qualified former banker for the position in this time of crisis. Nothing is final yet, but looks like Mallya is the favourite,” one of the people said.

Sources also told ET that while a few board members want current chairman MK Sharma, 70, to continue for some time, he has expressed his unwillingness. But if the board is unable to find a successor soon, Sharma may have to continue as chairman, sources in the know said. He was appointed as non-executive chairman of the bank on July 1, 2015, for a period of three years.

The maximum age of appointment of non-executive directors has been capped at 75 years. People in the know also said that the Reserve Bank of India expressed reservation over a name for the position of chairmanship that the board had proposed previously. ET could not ascertain independently the name the bank had proposed.

A Choice will be Made Soon
ICICI Bank did not respond to ET’s email queries. “These discussions keep happening between the board and RBI. These decisions don’t happen in a jiffy but the choice will be made soon,” said a person who did not wish to be named. In April, Mallya and a few other former Bank of Baroda officials were questioned by the Central Board of Investigation in the Rs 3,600-crore Rotomac fraud case.

It’s unclear if this would cause complication if Mallya were to become chairman. The sources cited above said that the board of ICICI Bank approached several reputed industrialists and retired bankers, but they largely declined to join the board because of controversy surrounding the bank’s CEO, Chanda Kochhar. The ICICI Bank board led by Sharma has been criticised in the past for its support for the CEO.

The board, which last week ordered an inquiry, It had cleared Kochhar of all alleged misdoings in a strongly worded statement on March 28. But the board ordered an independent inquiry last week— including a forensic audit—into fresh allegations of violations of code of conduct, conflict of interest and quid pro quo against her. Kochhar is coincidentally on her annual leave when the bank’s board ordered the probe.