HDFC Bank shares fall 5% as part-time chair of India’s largest private bank resigns over ‘ethics’
The merger between HDFC Bank and HDFC now makes the organization the fourth largest bank in the world.
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india’s shares HDFC Bank It fell 5% on Thursday following the resignation of its part-time chairman Atanu Chakraborty. marking governance and ethical concerns within the organization.
During an investor call on Thursday, interim part-time chairman Keki Mistry said Chakraborty had not provided the board with any evidence or details of the alleged unethical practices.
“Some of the incidents and practices I have observed within the bank in the last two years are not in line with my personal Values and Ethics,” Chakraborty said in his resignation letter.
Foreign institutional investors hold more than 47% stake in India’s largest private sector lender. The Government of Singapore and the Norwegian Government Pension Fund Global are among the largest foreign investors, owning around 2.3% and more than 1.2% of shares in HDFC Bank, respectively.
In his March 17 resignation letter submitted to HDFC Bank late on Wednesday, Chakraborty said the middle and lower levels of the organization “should form the core of a re-imagined organisation”.
Deven Choksey, founder and chief executive of asset management firm DRChoksey FinServ, said in a note on Thursday that Mistry’s appointment was a “strong firefighting move.”
It warned that HDFC shares could see “significant selling pressure” and advised investors to avoid “fishing the bottom” until governance concerns are addressed.
HDFC Bank and India’s banking system regulator, the Reserve Bank of India, did not immediately respond to emails seeking comment.
As of Wednesday, HDFC Bank’s market capitalization stood at 13.08 trillion rupees ($140 billion), higher than the 9.95 trillion rupees valuation of State Bank of India, the country’s largest public sector lender, according to LSEG data.
