Law firms hired by HDFC Bank find no basis for governance doubts raised by former chair Chakraborty
Law firms appointed by private sector lender HDFC Bank could not find any basis for the “statement” made by former chairman Atanu Chakraborty, the bank said in a statement late on Friday evening.
“In summary, the contemporaneous evidence examined was inconsistent with Chakraborty’s statement and the external law firms’ review failed to identify any basis for the statement,” the bench said.
In March, Chakraborty abruptly resigned in a letter to the board on 17 March, citing “certain events and practices within the bank” that were “incompatible” with his personal values and ethics. He did not explain in detail. Days later, he appeared on national television and implied that the “misselling” of Credit Suisse’s futures bonds was a point of contention between him and the bank’s management.
The legal review was conducted by law firms Wilson Sonsini Goodrich & Rosati and Wadia Ghandy & Co. HDFC Bank said the terms of reference for the review define the relevant period as two years before Chakraborty’s resignation and include review of meeting minutes and agenda papers, conduct of discussions and review of additional documents and information, among other procedures to be carried out.
Chakraborty, in an interview with CNBC TV18 on March 30, said that although he generally refrains from sharing discussions in the meeting room, in this case the issue was discussed publicly by managing director Sashidhar Jagdishan.
Once the legal review is over, the bank’s board will likely call for the reappointment of CEO Jagdishan. Mint reported on June 8: HDFC Bank’s board will consider Jagdishan’s reappointment only after receiving the findings of the statutory review, and the report is expected by the end of June.
Jagdishan, 61, who joined the bank in February 1996, will be up for reappointment as his current term expires in October.
On Friday, the bank said external law firms had conducted a thorough and objective review of Chakraborty’s statement. It said the legal review was carried out over a three-month period and included reviewing thousands of documents, as well as interviews with independent directors and several senior executives.
“The bank and outside law firms repeatedly requested that Chakraborty speak to outside law firms as part of the legal review, but ultimately the meeting with Chakraborty did not take place. Having completed a comprehensive legal review, the outside law firms found that Chakraborty’s statement and its implications were not substantiated by records and witness interviews,” he said.
According to the statement, the minutes of meetings attended by Chakraborty were the product of an extensive drafting, review and approval process, giving him the opportunity to record any “incidents and practices” that were allegedly inconsistent with his personal values and morals.
It was also stated that there was no contemporaneous support for Chakraborty’s statement in the board or board committee minutes or materials reviewed or in contemporaneous communications regarding the review and approval of minutes of meetings in which he attended.
“Witness interviews did not support or substantiate the statement; although Chakraborty had referred to the Dubai matter in his post-resignation public statements, no contemporaneous evidence has been identified to reflect that he expressed any concerns about his personal values and morals or disagreed with any decisions made by the Board or relevant Board Committees in connection with the Dubai matter (or other matters addressed by the Board and Committees).”
