I truly wonder, sometimes, if it is the Indian DNA. Is there a gene that compels us, at every possible opportunity, into questionable deals and arrangements without much regard for notions of conflict of interest? And if our brightest and best engage in such dealings, is it any surprise that much of the rest of the country wallows in corruption?
For why else would Chanda Kochhar, ICICI Bank CEO, post-graduate, Padma awardee who features prominently in ‘top women in business’ type lists do something like this? Her husband and husband’s brother entered into eyebrow-raising deals with Videocon, a company that took money from ICICI and is now one of their largest defaulters? While this family party happened, the CEO did not inform the bank about it.
The underlying transactions are complex, however initial evidence in news reports is worrisome. Of course, any criminality of Videocon-Kochhars-ICICI nexus still remains to be proven. But if it is then CEO, pati, devar and others will face penal provisions.
Meanwhile the conflict of interest is already so obvious, it could be a textbook example. Videocon did business with the CEO’s family, and the CEO never disclosed it internally. On these grounds alone, any professionally managed company – that ICICI claims to be – would have asked its CEO to step aside while an independent investigation was conducted.
But not here. When the ICICI allegations broke their board, meant to safeguard investors/ depositors/ stakeholders, rushed to issue a ‘clean chit’ statement for its CEO.
It is incomprehensible why the board did not order an investigation first. In a world where even Steve Jobs had to quit and the Uber founder had to leave, the ICICI board remains busy pandering to an employee CEO. Little did this board realise the shudders it sent across the world to investors who invest in Indian companies.
Why did they do this? Well, we come back to the gene that many Indians seem to carry. Also, of the dozen people on the ICICI board, almost half are insiders. Maybe they are taken in by the aura of their ‘most powerful woman’ CEO too.
If one is a student or employee somewhere, one might ask why affairs internal to ICICI matter to me? How does it matter what these CEO and board member types do anyway? Well, it does. If you hear about India’s jobs crisis, or feel there are not enough opportunities or the competition is insane, then ICICI’s actions matter. It is these people who create mistrust about Indian companies worldwide. Because of them, investors think ten times about investing in India or Indian companies.
Poorly governed institutions like these stifle true entrepreneurship and startups, starving the truly deserving of capital, and giving it to shady companies instead. With fewer investments, entrepreneurs and startups, there are fewer jobs. That’s why you don’t get paid as much or why it is so hard for your son or brother to find a decent job.
It was easy to slam PNB, a public sector bank, when the Nirav Modi scam broke. Privatising it was offered as a solution. However, the ICICI fiasco has shown us, public or private, Indians will be shady everywhere.
At the time of writing this article, the ICICI board is still dithering over keeping their CEO. The board has to realise the damage they are causing to Indian corporates’ image worldwide.
Apart from the shady gene, maybe we Indians will also do better to guard against the bhaiya-bhabhi gene. We love promoting our relatives don’t we? Well, no relative or even spouse is worth compromising the trust millions have placed in you.
Doing the right thing may not be instinctive to our Indian psyche, maybe because we have all grown up with less, with a scarcity mentality. However, whether we are CEOs, board members or just common Indians, it is time we check these instincts and do the right thing. Our future is at stake.
April 19, 2018 ()