Class-Action Lawsuit Planned Against HDFC Bank For Misleading Investors; Bank Refutes Charges
As per the reports, the US-based Rosen Law Firm has announced the investigation of potential securities claims against HDFC Bank Ltd after the allegations that the bank may have issued materially misleading business information to investors.
What Does HDFC Bank Say?
The Rosen Law firm said that they are preparing a securities lawsuit on behalf of HDFC Bank shareholders, during a press release issued on Sunday night.
On the other hand, HDFC Bank said they didn’t have any knowledge of any lawsuit and according to the private lender, “it looked frivolous as we believe we have been transparent in our disclosures”.
The bank said that they are getting details of it and further they will examine it and respond to it as appropriate.
What Does The Law Firm Say?
So far, the law firm did not respond to any email seeking some response.
Basically, it is relying on media reports about a probe conducted by the bank.
Before this, the bank had found a conflict of interest in its vehicle financing operations on July 13 stated.
This affected HDFC Bank’s American Depositary as its Receipt price fell $1.37, or 2.83%, according to the law firm.
Apart from this, as per a report by Bloomberg, the consumer credit company, Experian’s India unit had informed the RBI that the private-lander had been late in providing information on its loans, including loan repayments status, of its borrowers.
A similar kind of class-action suit was prepared by Rosen Law against Infosys Last year.
When a whistleblower alleged malpractices by a few key management personnel and the suit was dismissed in May this year.
On June 20, the HDFC Bank had dismissed over six senior and mid-level executives as they have indulged in practices causing invade to the bank’s code of conduct and governance standards.
Apart from this, the law firm also quoted media reports about allegations of improper practices and conflict of interest in HDFC Bank Ltd’s vehicle financing operations involving its former unit head.
Following allegations, HDFC Bank has launched a probe on vehicle finance lending practices in July, against the conduct of a key executive in the auto lending business.
The Rosen Law Firm said, “if you purchased securities of HDFC Bank please visit the firm’s website to join the securities action,”.
The shares of HDFC Bank traded at Rs 1,043.75 apiece on the NSE in the afternoon session, recovering from its downfall from yesterday.