Money & Banking

HDFC Bank denies allegations, says will defend itself in US lawsuit

Our Bureau. Mumbai | Updated on September 21, 2020 Published on September 21, 2020

HDFC Bank, on Monday, said it will defend itself in the lawsuit filed by US-based Rosen Law Firm and expects its response to the lawsuit to be due early next year.

“...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 202,” the private sector lender said in a regulatory filing.

“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,” it further said.

As reported by BusinessLine earlier, two US based law firms – Rosen Law Firm and Schall Law Firm – have filed class action suits against HDFC Bank and have sought damages on behalf of investors for false and misleading statements.

The lawsuit, filed by Rosen Law Firm, names the bank, its current Managing Director and CEO Aditya Puri, CEO-designate Sashidhar Jagdishan, and company secretary Santosh Haldankar as the defendants.

Misleading statements

It said the lender has made false and misleading statements and failed to disclose to investors that it had inadequate disclosure controls and procedures and internal control over financial reporting.

“...as a result, the bank maintained improper lending practices in its vehicle-financing operations; accordingly, earnings generated from the bank’s vehicle-financing operations were unsustainable; all the foregoing, once revealed, was foreseeably likely to have a material negative impact on the bank’s financial condition and reputation; and as a result, the bank’s public statements were materially false and misleading at all relevant times,” Rosen Law Firm said, adding that when the true details entered the market, the lawsuit claims that investors suffered damages.

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Published on September 21, 2020
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