'No Proof': HDFC On Ex-Chairman Who Resigned Over "Ethical Differences"

HDFC Bank said on Friday a legal review found no evidence supporting concerns raised by former Chairman Atanu Chakraborty when he resigned in March citing ethical differences with India's largest private lender.US-listed shares of HDFC Bank rose 1.7%.Chakraborty's sudden exit wiped out nearly 14%, or about $16 billion, of the bank's market value in the following weeks, and forced India's central bank to issue a rare statement reassuring investors and depositors over the health of the systemic lender.Law firms Wilson Sonsini and Wadia Ghandy conducted the legal review of the matter that has exposed leadership strain at the bank. Majority owned by foreign institutional investors, the lender has also faced ire over a stock that has struggled since a $40 billion merger with parent HDFC Ltd in 2023."Having now completed an extensive legal review, External Law Firms found that Mr. Chakraborty's statement and its implications were not substantiated by the record and witness interviews," the law firms said in a report published to stock exchanges by HDFC Bank late on Friday.Reuters reported exclusively last month that the law firms have not found any material deficiencies in governance practices or board processes.The three-month legal review found no evidence from board committee minutes or witness interviews that Chakraborty raised concerns that "happenings and practices" at the bank were not aligned with his personal "values and ethics", the law firms said on Friday.There was also no evidence that he disagreed with board decisions regarding the "Dubai matter", the law firms said, referring to Chakraborty's previous statement to CNBC-TV18 that HDFC Bank delayed taking action against officials involved in mis-selling Additional Tier-1 bonds to investors in Dubai.The bank and the external law firms "repeatedly" asked Chakraborty to speak with the law firms as part of the review, but the interview did not take place, the report added.Chakraborty did not immediately respond to a Reuters request for comment on the report.The conclusion of the probe allows HDFC Bank to proceed with its application to the Reserve Bank of India (RBI) to reappoint CEO Sashidhar Jagdishan, whose three-year term expires in October.The CEO post's application, due by the end of May, had been delayed pending the outcome of the review. The central bank must approve all top appointments at Indian lenders.(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)