US law firm files suit against HDFC Bank

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A renowned law firm in the US has filed a case action suit against HDFC Bank, claiming for the losses incurred by the investors because of “materializing, false and misleading” representations.

The suit has been filed by Rosen Legal naming the bank’s Managing Director and Chief Executive Aditya Puri, his chosen Sashidar Jagdishan, and Company Secretary Santhosh Haldnakar, who were the defendants in the suit, as per a copy of the complaint uploaded on the website. The complaint didn’t mention the exact quantum of the damages sought, many investors had suffered. As per the suit, the bank officials engaged in a plan, scheme, conspiracy, and courses of conduct, under which they recklessly engaged in acts, transaction practices, and courses of business.

The Allegation pertains to the vehicle finance vertical, where the bank later acknowledges having found some improprieties which resulted in some executives being acted against. The bank had adequate disclosure controls and procedures and internal control over financial reporting, maintained a lending practice in the vehicle financing making the operations.

The defendants know that the adverse facts had not been disclosed and were being concealed from the public. The individual defendants are liable for the false statements and omissions pleaded herein.

The period where the losses were alleged to have happened to the investors between July 31, 2019, to July 10, 2020, as referred to “class period”. The probe initiated by the law firm, the bank had termed this as a “Frivolous” one to assert that it has been transparent in all its disclosure.

There was speculations over the circumstances under which its head of the unit left the office, but the bank later clarified that it was a scheduled retirement. The HDFC bank American Depository receipt was trading 0.81 percent down at USD 50.05 at 21.15 hours IST on the NYSE. The scrip shed 0.94 percent to close at Rs. 1,083.25 apiece on the BSE.

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