HDFC Bank has denied allegations raised against it by two US law firms of making false statements and not maintaining appropriate disclosure controls. The bank said in a stock exchange filing on September that it will defend itself vigorously against the lawsuit filed by the US law firms.
“The Bank is aware of a complaint that was recently filed against the Bank and its three employees in the United States. The lawsuit, which was filed by a single small security holder who seeks to represent a class of the Bank's security holders, is based on allegations that the security holder claims caused a temporary decline in the Bank's ADR stock price in July 2020. The Bank denies the allegations and intends to defend itself vigorously in the lawsuit. The Bank expects its response to the lawsuit to be due in early 2021. Since the lawsuit is at a premature stage, there is no matter at this point of time which requires disclosure as per Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015,” the lender clarified.
Earlier, US-based Rosen Law Firm and Schall Law Firm had filed class-action lawsuits against HDFC Bank accusing the company of making false and misleading statements and for failing to maintain appropriate disclosure controls and internal control on financial reporting.
The complaint names HDFC Bank's outgoing Managing Director Aditya Puri, CEO-designate Sashidhar Jagdishan and Company Secretary Santosh Haldankar as defendants.
Rosen's lawsuit claims that the defendants made false and/or misleading statements and failed to disclose to investors that HDFC Bank had inadequate disclosure controls and procedures and internal control over financial reporting.
According to the Schall Lawsuit, the company made false and misleading statements to the market. HDFC Bank has been accused of failing to maintain appropriate disclosure controls and internal controls on financial reporting. In addition, it alleged that the lender engaged in improper lending practices in its vehicle financing business.