HDFC's Legal Review Finds No Merit in Ex-Chairman Atanu Chakraborty's Concerns

Law firms appointed by HDFC Bank to examine concerns raised by former chairman Atanu Chakraborty have found no evidence supporting the issues flagged in his resignation letter, according to a report by The Economic Times.

Sources cited in the report said the review conducted so far has not identified evidence to substantiate the concerns referenced by Chakraborty. The findings have reportedly been informally shared with the bank’s legal team and are expected to be submitted to the audit committee as early as this week, following which the full board will review the report.

Chakraborty resigned on March 18, saying certain developments within the bank over the last two years were not aligned with his ethics and value systems. His sudden exit had triggered concerns across the banking sector and led to an immediate decline in the bank’s stock.

Review Finds No Governance Irregularities

To examine the matter, HDFC Bank appointed law firms Wadia Ghandy and Trilegal along with US-based law firm Wilson Sonsini to independently review the circumstances surrounding Chakraborty’s resignation.

According to the report, the review covered board meeting recordings, agendas and minutes from the last two years to determine whether Chakraborty had raised concerns related to governance or unethical practices during his tenure. It also examined whistleblower complaints escalated to the board and whether appropriate action had been taken.

Another source cited by the publication said the preliminary findings do not indicate governance irregularities or ethical breaches of the nature implied in the resignation letter. The review also reportedly found no material suggesting Chakraborty had formally raised such concerns during board proceedings.

Board to Examine Findings

The audit committee, chaired by M D Ranganath along with members Lily Vadera and Harsh Kumar Bhanwala, will review the findings before the matter is taken up by the full board.

Following the resignation, Managing Director and CEO Sashidhar Jagdishan had earlier said in an interview with ET that the bank would review past decisions and address any areas requiring improvement, while acknowledging the bank had not fully understood what led to Chakraborty’s sudden exit.