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HDFC Bank shares will be closely tracked by investors in Monday’s trading session after a First Information Report (FIR) was filed over the weekend against the bank’s Managing Director and CEO, Sashidhar Jagdishan. The complaint, lodged by the Mehta family—trustees of the Lilavati Kirtilal Mehta Medical Trust—accuses Jagdishan of alleged financial misconduct related to the trust.
The bank, in a strongly worded rebuttal issued late Sunday evening, called the charges “malicious and baseless” and said they were the latest attempt by “unscrupulous persons” to derail recovery efforts related to a defaulting borrower, Splendour Gems.
“Having exhausted all legal avenues without success, these individuals have now resorted to launching personal attacks against HDFC Bank and its MD & CEO in a clear attempt to malign their reputation and intimidate the bank into halting its recovery actions,” HDFC Bank said in a public statement.
The FIR and the bank’s response are likely to cast a shadow over what has otherwise been a solid run for the stock. The scrip closed 1.42% higher at ₹1,978.70 on Friday, and has gained nearly 11% year-to-date.
While legal experts say the filing of an FIR does not imply guilt, market participants may watch for any regulatory comment or escalation.
The Mehta family, through the Lilavati Trust, has called for Jagdishan’s suspension and prosecution, alleging fund mismanagement. HDFC Bank maintains that the Trust’s actions are retaliatory in nature, designed to delay repayment of long overdue loans.
Meanwhile, analysts are bullish on the stock. Elara Securities has a target of Rs 2,164 on the stock, 13% upside from its earlier levels of Rs 1,907, as the analyst believes the changing liquidity scenario and changes in regulatory approach would play in favour of the bank making balance sheet realignment easier. “Transitioning through the tough journey hereafter should be more favourable for the bank,” states the report.
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