HDFC Bank has announced that an independent legal review found no evidence to support the concerns raised by its former Chairman, Atanu Chakraborty, who resigned in March citing differences over ethics and values within the bank.
The review, conducted over three months by external law firms Wilson Sonsini and Wadia Ghandy, concluded that there was no material evidence in board records or witness testimonies indicating that Chakraborty had formally expressed concerns about the bank's governance or decision-making processes.
Independent Probe Clears Governance Practices
According to the report released by HDFC Bank, investigators examined board committee minutes and interviewed several individuals connected to the matter. The findings stated that Chakraborty's claims regarding practices that allegedly conflicted with his personal values were not supported by the available records.
The law firms also said they found no indication that the former chairman had objected to board decisions concerning the bank's handling of the Dubai-related issue involving the sale of Additional Tier-1 (AT1) bonds.
Former Chairman Did Not Participate in Review
The report noted that both HDFC Bank and the external legal teams made repeated efforts to invite Chakraborty to participate in the investigation. However, the interview did not take place, and the review was completed based on documentary evidence and discussions with other relevant individuals.
At the time of publication, Chakraborty had not publicly responded to the findings.
Leadership Transition Moves Forward
The completion of the legal review removes a key hurdle for HDFC Bank as it prepares to seek approval from the Reserve Bank of India (RBI) for the reappointment of Managing Director and CEO Sashidhar Jagdishan. His current three-year term is scheduled to end in October.
The bank had delayed submitting the reappointment proposal while the legal review was underway. RBI approval is mandatory for senior leadership appointments at private sector banks in India.
Market Reaction
HDFC Bank's U.S.-listed shares gained around 1.7% following the release of the review. Chakraborty's resignation earlier this year had triggered investor concerns, leading to a sharp decline in the bank's market value before regulatory assurances helped stabilize sentiment.