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Friday, September 18, 2020

US investor rights law firm announces securities probe against HDFC Bank

According to the law firm, on July 13, 2020, there was a report that HDFC Bank had “conducted a probe into allegations of improper lending practices and conflicts of interests in its vehicle-financing operations involving the unit’s former head.

By: ENS Economic Bureau | Mumbai | August 18, 2020 3:16:35 am
Renu Sud Karnad, managing director, HDFC, said, “The government’s PMAY scheme has been successfully assisting homebuyers belonging to different income groups since 2015. The scheme is in line with our overall philosophy that every Indian must have a home of their own.” (File)

US-based Rosen Law Firm, a global investor rights law firm, has announced an investigation of potential securities claims on behalf of shareholders of HDFC Bank, resulting from allegations that “the bank may have issued materially misleading business information to the investing public”.

“Rosen Law Firm is preparing a securities lawsuit on behalf of HDFC Bank shareholders,” it said in a statement.

“We were unaware of any such development (class action lawsuit) till we heard about it from the media a little earlier today. We are getting details of it. We’ll examine it and respond to it as appropriate. Prima facie it does look frivolous as we believe we have been transparent in our disclosures,” the bank said.

According to the law firm, on July 13, 2020, there was a report that HDFC Bank had “conducted a probe into allegations of improper lending practices and conflicts of interests in its vehicle-financing operations involving the unit’s former head.” On this news, HDFC Bank’s American depositary receipt price fell $1.37 per share, or 2.83 per cent, to close at $47.02 per share on July 13, 2020, it said.

On July 19, 2020, HDFC Bank reported its financial results for the first quarter of the bank’s 2021 fiscal year, missing analyst estimates with respect to net profit and reporting deterioration in its asset quality, the law firm said.

On August 6, 2020, there was a report in the media that in July 2020, Experian Plc’s Indian unit had informed the Reserve Bank of India that “HDFC Bank has been late in providing details of its loans, including the repayment status of its millions of retail borrowers” and that “[s]uch tardiness has been an issue for about two years”, Rosen Law said. HDFC Bank terminated the services of half a dozen executives following irregularities in the auto loans business.

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