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business | IST

IndusInd Bank, Spandana Sphoorty argue over top management appointments

Mini

IndusInd Bank has come up with a statement saying that Shalabh Saxena and Ashish Damani have not tendered their resignations yet, and therefore their appointment at Spandana Sphoorty is not valid.

The two MFIs that are at the center of the controversy have had their fair share of troubles – Bharat Financial, which is owned by IndusInd Bank, and Spandana Sphoorty. Now, they seem to be sparring over the appointment of that top management.
On Monday, Spandana Sphoorty said it has appointed Shalabh Saxena and Ashish Damani as the CEO and CFO respectively, who were earlier the CEO and CFO of Bharat Financial, which is owned by IndusInd Bank.
Today, IndusInd Bank has come up with a statement saying that Shalabh Saxena and Ashish Damani have not tendered their resignations yet, and therefore their appointment at Spandana Sphoorty is not valid. They also said that as per their contract, they cannot really join a competitor.
The bank also said that both of them are involved in the internal review that is ongoing with respect to that technical glitch at IndusInd bank which occured a few days earlier. A whistleblower had alleged some evergreening at Bharat Financial, which IndusInd Bank later clarified was merely a glitch because of which about 84,000 loans were given out to customers without their consent.
Both the RBI and IndusInd Bank is looking into it. Therefore, because of that ongoing review, IndusInd Bank said the two gentlemen cannot be relieved of their roles.
At the same time, Spandana Sphoorty also has its fair share of troubles. Its founder recently exited after some differences with certain investors.
For now, the statement given by Spandana Sphoorty is very clear that Shalabh Saxena and Ashish Damani have only accepted the position but it remains to be seen whether or not they have actually been relieved of their role. So, at Spandana Sphoorty at least for the time being the top management vacuum still remains.