Two US-based law firms — Rosen Law Firm and Schall Law Firm — have announced an investigation into claims against HDFC Bank, which could potentially result in lawsuits against the lender.
Rosen Law Firm, which is a global investor rights law firm, said it is preparing a securities lawsuit on behalf of HDFC Bank shareholders.
“Rosen Law Firm announces an investigation of potential securities claims on behalf of shareholders of HDFC Bank resulting from allegations that HDFC Bank may have issued materially misleading business information to the investing public,” it said in a release on August 16.
“On July 19, 2020, HDFC Bank reported its financial results for the first quarter of the Bank’s 2021 fiscal year, missing analyst estimates with respect to net profit and reporting a deterioration in its asset quality,” it further said.
Meanwhile, Schall Law Firm, a shareholder rights litigation firm, also announced that it is investigating claims on behalf of investors of HDFC Bank for violations of the securities laws..
“The investigation focuses on whether the company issued false and/or misleading statements and/or failed to disclose information pertinent to investors,” it said in a statement.
“We were unaware of any such development (class action lawsuit) till we heard about it from the media a little earlier today. We are getting details of it. We’ll examine it and respond to it as appropriate. Prima facie it does look frivolous as we believe we have been transparent in our disclosures,” HDFC Bank said in a statement.
Vehicle financing under scanner
HDFC Bank, which is the country’s largest private sector lender, has been in the news on allegations of improper lending practices and conflicts of interests in its vehicle-financing operations involving the unit’s former head.
News agency Bloomberg had recently also reported that credit information bureau Experian’s Indian unit had informed the Reserve Bank of India that HDFC Bank had been late in providing details of its loans, including the repayment status of its millions of retail borrowers.
The lender’s Managing Director and CEO Aditya Puri at the annual general meeting on July 18 had confirmed that the bank conducted an inquiry into vehicle loans and appropriate action has been taken against employees involved in the misconduct.
He had also commented on recent high level exits and had said that Munish Mittal, Chief Information officer; Abhay Aima, Group head, Private Banking; and Ashok Khanna, Group head, automobile loans; have left. Puri said Aima’s exit was amicable and Mittal has left to study abroad at Oxford.
Puri retires on October 26 and the RBI has approved the appointment of Sashidhar Jagdishan as the next Managing Director and CEO of HDFC Bank.