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Shareholders Deserve Better: ICICI Bank’s US Disclosures Expose Indian Stock Market’s Low Standards

For close to five months, ICICI Bank has been in the eye of the storm on account of corporate governance issues. Stakeholders in the bank have had to learn about some of the details through media reports as the bank management has been sparse in disclosures.

This week, finally, stakeholders got an official account of the challenges when ICICI Bank filed a report with the US capital market regulator to meet its listing requirements there.

The essence of the filing is that the some of the bank’s operational aspects are being studied independently by Sebi and CBI. According to the bank these investigations could impact the efficacy of its operations.

The highlight of the US filing is that ICICI Bank’s governance challenges can be deemed to be price sensitive as they impinge on its operations. For shareholders in India, it needed a filing in the US to learn about details that could influence the value of their investment. It’s time Sebi took a look at this issue.

Varying disclosure standards are apparent when a company is listed in another jurisdiction. But for the many companies which are listed only in India, the lesson from the ICICI Bank episode is that the standard for mandating price sensitive disclosures is low. Shareholders in India deserve better for their investment.

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