Former HDFC Bank chairman Atanu Chakraborty has termed the appointment of external law firms and the resulting report a “superfluous exercise”, saying he chose not to speak because the bank refused to disclose the terms of reference or the legal basis for such a review.
Chakraborty told Mint over the phone on Saturday that he asked the bank for the terms of reference at least 5-6 times to no avail. “I do not crave for the certificate of an external agency,” he said.
In March, Chakraborty, then the chairman of India’s largest private-sector lender, suddenly resigned, with his 17-March letter to the board citing “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics.
He did not elaborate. Days later, he went on national television to hint that the “mis-selling” of Credit Suisse’s perpetual bonds was a bone of contention between him and the bank's management.
“My resignation letter did not point to any insinuation, and it should be read in its entirety. I wanted the board to introspect,” said Chakraborty, who joined the HDFC Bank board in May 2021.
Clean chit
His response comes after law firms tasked by HDFC Bank found no “basis for the statement” made by Chakraborty.
“In sum, the contemporaneous evidence reviewed was inconsistent with Chakraborty’s statement, and external law firms’ review did not identify any basis for the statement,” the bank said in a statement late on Friday evening.
Law firms Wilson Sonsini Goodrich & Rosati and Wadia Ghandy & Co. conducted the legal review. The bank said the terms of reference for the review defined the relevant time period as the two years preceding Chakraborty's resignation and included, among other procedures to be performed, reviewing meeting minutes and agenda papers, conducting interviews, and reviewing additional documents and information.
The statement said the bank and external law firms repeatedly requested that Chakraborty speak with them as part of the legal review, but ultimately, the interview with Chakraborty did not occur.
“The appointment of the law firm and the outcome is a superfluous exercise. What would they have found out from the minutes of the meeting, which are anyway seen by the Reserve Bank of India (RBI)?" he told Mint.
Appointing external law firms, including an American one, was just a compliance exercise, according to Chakraborty. “Jamie Dimon [chairman of the board and chief executive of JPMorgan Chase & Co.] would not have come to an Indian law firm.”
New CEO appointment
HDFC Bank said on Friday evening that no contemporaneous support for Chakraborty’s statement was found in the board or board committee minutes or materials reviewed, or in contemporaneous communications about the review and approval of the minutes of meetings he attended.
“Witness interviews did not support or substantiate the statement; and although Chakraborty referred to the Dubai matter in post-resignation public statements, no contemporaneous evidence was identified reflecting that he raised any concerns about his personal values and ethics, or that he disagreed with any decisions made by the Board or relevant Board Committees, in connection with the Dubai matter (or any other matters that the Board and those Committees addressed).”
With the legal review out of the way, the bank’s board is likely to take a call on CEO Jagdishan’s reappointment. Mint reported on 8 June that HDFC Bank's board will consider Jagdishan's reappointment only after it receives the findings of the legal review, which is expected by the end of June.
Jagdishan, 61, who joined the bank in February 1996, will come up for a reappointment as his current term ends in October.