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HDFC Bank Hires Law Firms to Probe Ex-Chairman Atanu Chakraborty's Exit

HDFC Bank's Board has approved appointing external law firms to review the resignation letter of former part-time Chairman Atanu Chakraborty. Chakraborty resigned stating certain bank developments conflicted with his personal values, though he cited no specific wrongdoing. The Reserve Bank of India has approved Keki Mistry as the interim part-time Chairman for three months. The bank describes the legal review as a proactive step to strengthen governance oversight and transparency.

Key Points: HDFC Bank Appoints Law Firms to Review Chairman's Resignation

  • External legal review of resignation
  • Resignation cites values misalignment
  • RBI approves interim Chairman
  • Bank reiterates governance commitment
  • Shares rebound after recent decline
2 min read

HDFC Bank appoints external law firms to examine Atanu Chakraborty's exit

HDFC Bank appoints external law firms to examine the resignation of former Chairman Atanu Chakraborty to reinforce governance standards.

"certain developments within the bank over the past two years were not aligned with his personal values and ethics - Atanu Chakraborty"

Mumbai, March 24

Largest private lender HDFC Bank said its Board has approved the appointment of external law firms, both domestic and international, to review the resignation letter of former part-time Chairman and Independent Director, Atanu Chakraborty, in a move aimed at reinforcing governance standards.

The decision was made at a Board meeting on March 23, with the law firms tasked with reviewing the contents of Chakraborty's resignation and submitting their report within a reasonable timeframe, the bank said in an exchange filing.

The private lender described the step as proactive, underscoring its commitment to transparency and robust corporate governance practices.

The move follows Chakraborty's resignation on March 18 with immediate effect. In his letter, he had stated that certain developments within the bank over the past two years were not aligned with his personal values and ethics. However, the bank clarified that he did not point to any specific happenings or practices that were inconsistent with his values.

Chakraborty has also publicly maintained that his exit was not linked to any wrongdoing or malpractice within the bank, but was driven by a divergence in ideologies and approach. He had joined the bank's board in 2021.

Following his resignation, the Reserve Bank of India (RBI) approved the appointment of Keki Mistry as interim part-time Chairman for a period of three months starting March 19. Mistry has indicated that there are no major concerns facing the bank after Chakraborty's departure.

The bank reiterated that the external review is intended to further strengthen governance oversight and ensure clarity around the circumstances of the resignation.

HDFC Bank reportedly terminated three employees, including senior executives, following an internal investigation into alleged mis-selling of high-risk AT1 bonds to NRI clients through its overseas operations.

Shares of HDFC Bank on Tuesday traded over 3 per cent higher at Rs 767.75, hitting an intra-day high on the BSE (as of 10 am). The banking stock had declined 11.73 per cent between the close on March 18 and March 23.

- IANS

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Reader Comments

P
Priya S
"Divergence in ideologies and approach" sounds like corporate-speak for a major internal disagreement. What were these "certain developments" over two years that didn't align with his values? The bank should share the law firms' findings with the public, not just the board. We are depositors too.
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Aman W
The timing is suspicious. First, the resignation, then news of employees fired for mis-selling bonds to NRIs. Are these things connected? 🤔 HDFC is a trusted name, but this external review is necessary to clear the air. Hope RBI is also keeping a close watch.
S
Sarah B
As an NRI customer, the part about mis-selling AT1 bonds is more concerning to me than the chairman's exit. Good that they took action, but it makes you wonder about the sales culture. This external review should also look at customer protection practices.
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Karthik V
Respect to Mr. Chakraborty for sticking to his ethics and resigning. In our corporate culture, too many people stay silent. The bank's move to review it is good, but the real test is if they will actually change anything based on the findings or if this is just for show.
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Nikhil C
The stock fell 11% in a few days after his resignation. That's the market speaking. Now it's recovering a bit with this news. Ultimately, for us retail investors, stability and clean governance matter more than anything. Hope Keki Mistry can steer things smoothly.

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