HDFC Share Falls as Chairman Quits, Execs Fired

The share of the Indian banking and financial services titan HDFC Bank Limited continues to see selling pressure.

On Monday, the stock dropped to ₹756.30, down by more than 3% from the previous closing price of ₹780.45. At the time of writing, HDFC is changing hands for ₹757.60, down by 9.55% over the past five trading days.

Leadership Change

The stock continues to see losses after news emerged last week that HDFC Bank’s part-time chairman and independent director Atanu Chakraborty has resigned.

In a letter to the bank’s chairman of governance, nomination, remuneration committee, Chakraborty said that he is quitting because certain happenings and practices within the bank that he observed over the last two years do not align with his personal values and ethics.

Following Chakraborty’s exit, Keki Mistry was appointed to serve as HDFC Bank’s interim part-time chairman for a period of three months. 

Mis-selling of High-Risk AT-1 Bonds 

The bank has also terminated three senior employees tied to the alleged mis-selling of AT-1 bonds issued by Credit Suisse: Sampath Kumar, group head of branch banking, Harsh Gupta, EVP for Middle East, Africa and NRI business, and Payal Mandhyan, SVP.

According to some customers, they were not properly informed about the high-risk nature of the bonds, claiming that staff at the bank’s Dubai and Bahrain branches wrongfully presented the financial instruments as fixed-maturity products with assured returns.

Investors eventually sustained losses after the bonds were written off during the UBS-led bailout of Credit Suisse.

“The bank identified certain gaps in client onboarding requirements at its DIFC branch in the UAE and has completed a detailed and objective review of the matter,” the bank said, according to The Economic Times.

“Appropriate remedial actions have been taken in line with internal policies. Personnel changes have been undertaken along with appropriate action as per the bank’s conduct regulation.”