HDFC Bank Board Meets 18 June: Legal Review Wraps Up, Chairman Question Still Open

The HDFC Bank board is set to meet on 18 June to review findings from law firms appointed to examine concerns raised by former chairman Atanu Chakraborty in his resignation letter.

The board will also consider a three-month extension for interim part-time chairman Keki Mistry, subject to Reserve Bank of India approval.

The audit committee met on Tuesday ahead of the full board meeting to review the law firms' findings. The committee is chaired by M D Ranganath and includes members Lily Vadera and Harsh Kumar Bhanwala.

What The Review Found

HDFC Bank had appointed domestic law firms Wadia Ghandy and Trilegal alongside US-based Wilson Sonsini to independently examine the circumstances surrounding Chakraborty's resignation.

The scope covered board meeting recordings, agendas and minutes from the past two years, whistleblower complaints escalated to the board and whether appropriate action had been taken on those complaints.

Preliminary findings suggest no governance irregularities or ethical breaches of the nature implied in the resignation letter. The review also reportedly found no material indicating Chakraborty had formally raised such concerns during board proceedings.

What Triggered The Review

Chakraborty, a former secretary at the Department of Economic Affairs and a retired Indian Administrative Service officer, resigned abruptly on 18 March, citing developments within the bank that he described as incongruent with his ethics and value systems. The exit triggered an immediate fall in the bank's stock price.

HDFC Bank's top management and board had earlier decided that a new chairman should be appointed only after the legal review findings were placed before the board. Managing Director and Chief Executive Sashidhar Jagdishan had said in an interview at the time that the bank would review past decisions and address areas requiring improvement.

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The Chairman Question

Mistry's term as interim part-time chairman concludes on 18 June. The bank has sought Reserve Bank of India approval for a 90-day extension and is awaiting the regulator's response before deciding the next step.

Source:

The Economic Times