HDFC Bank shares surged up to 1% to touch the intraday high during the pre-open session on the National Stock Exchange today after the lender termed the FIR filed against its MD and CEO as frivolous and baseless. After open, the stock has remained range-bound. At 10:00 am, shares were trading 0.2% higher on the NSE.
HDFC Bank Stock Sees Slight Uptick as Lender Denies Fraud Claims Against MD-CEO
The FIR against HDFC Bank stems from a decades-old loan default case involving Splendour Gems, owned by the Mehta family, with dues of Rs 65.22 crore still pending, the lender claimed, and added that the complaint is retaliatory
HDFC Bank shares surged up to 1% to touch the intraday high during the pre-open session on the National Stock Exchange today
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The Lilavati Trust, which manages a prominent healthcare institution in Mumbai, had issued a statement calling for the immediate suspension and prosecution of HDFC Bank managing director and CEO Sashidhar Jagdishan. The trust accused him of involvement in a series of financial frauds.
The Trust also called upon the board of HDFC Bank, the RBI, SEBI and the Finance Ministry to suspend Jagdishan from all executive and board roles with immediate effect. The police complaint was filed by the Mehta family, through Lilavati Kirtilal Mehta Medical Trust. According to reports, the complaint alleged that Jagdishan received Rs 2.05 crore from a former trustee of the trust to harass the father of a current trustee.
HDFC Bank firmly refuted the accusations in an official statement on Sunday, and described them as “malicious,” “unfounded,” and a blatant abuse of the legal system. “The Bank firmly believes that these actions are a deliberate attempt to obstruct and undermine legitimate recovery proceedings related to substantial long-outstanding dues owed by Splendour Gems,” the statement said. Splendour Gems is owned by the Mehta family and it had defaulted on loan facilities granted by HDFC Bank along with other consortium banks in 1995.
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Recovery certificate had been issued by the Debt Recovery Tribunal back in 2004, but the company owed Rs 65.22 crore as of May, the private lender said. HDFC Bank further noted that members of the Mehta family have lodged several civil and criminal complaints in retaliation to its recovery efforts.
The bank had said that it will pursue all lawful remedies to recover the outstanding dues and protect the reputation of the bank, its board, and employees.
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