MUMBAI: HDFC Bank on Friday said an external legal review by two law firms— Wilson Sonsini Goodrich & Rosati and Wadia Ghandy & Co—into concerns raised by former chairman Atanu Chakraborty’s resignation letter found “no contemporaneous support” for his allegations in board or committee records, meeting materials or related communications.
It paves the way for the process to decide on whether to propose extension of the tenure of the bank’s MD & CEO Sashidhar Jagdishan whose second term ends in October. Jagdishan has indicated in earlier media interviews that he has made himself available for another term if approved by the board.
The legal review report is expected to be places before the bank’s audit committee, following which the board will send its choice of candidates to the Reserve Bank of India.
In a filing with the exchanges, the bank said, “No contemporaneous support for Mr Chakraborty’s statement was found in the Board or Board Committee minutes or materials reviewed, or in contemporaneous communications about the review and approval of the minutes of meetings he attended.” The bank added that witness interviews also did not support or substantiate the claims.
HDFC Bank also said that the legal review was conducted over a three-month period and involved the review of thousands of documents and interviews of the Independent Directors and several members of senior management.
Importantly, the bank and external law firms repeatedly requested that Chakraborty speak with the latter as part of the legal review, but ultimately the interview with it did not happen.
The review covered the two years preceding Chakraborty’s resignation and included examination of board and committee minutes, agenda papers, interviews with relevant individuals, and a review of additional documents and information.
The legal firms also examined whether any concerns raised by Chakraborty were reflected in official records, whether he had formally recorded any dissent, and whether such concerns, if any, were addressed.
The review was commissioned after Chakraborty stepped down as chairman in March, citing “incongruence” between his personal values and the bank’s practices. His resignation, which did not provide specific details, raised governance concerns around India’s largest private sector lender and weighed on investor sentiment, resulting in a decline of over Rs 1 lakh crore in the bank’s market capitalisation.
The report also rejected Chakraborty’s reference to the Dubai matter in subsequent public statements, saying no contemporaneous evidence was found showing that he had raised concerns regarding personal values and ethics or disagreed with any decisions taken by the board or relevant board committees.
“In sum, the contemporaneous evidence reviewed was inconsistent with Chakraborty’s statement, and the external law firms’ review did not identify any basis for the statement,” the bank said in its exchange filing.
According to the filing, all matters raised at the board level were handled in accordance with prescribed processes, with no material lapses identified.
Source: The Financial Express
