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Photo: Mint
Photo: Mint

HDFC Bank faces lawsuit from US-based law firms

  • According to Rosen Law Firm, HDFC Bank reported its financial results for the first quarter of the fiscal year 2021, missing analyst estimates with respect to net profit and reporting a deterioration in its asset quality

MUMBAI : US-based Rosen Law Firm has announced an investigation of potential securities claims on behalf of shareholders of HDFC Bank Ltd following allegations that the bank may have issued materially misleading business information to investors

In a press release issued on Sunday night, Rosen Law firm said it is preparing a securities lawsuit on behalf of HDFC Bank shareholders.

On 14 July, Mint had reported that HDFC Bank is looking into the alleged improper lending practises in its vehicle financing arm involving the business head Ashok Khanna. The allegation was that the bank had forced its car loan customers to purchase a vehicle tracking device.

Following this news, HDFC Bank's American depositary receipt price fell by $1.37 per share, or 2.83%, to close at $47.02 per share.

According to the law firm, HDFC Bank reported its financial results for the first quarter of the fiscal year 2021, missing analyst estimates with respect to net profit and reporting a deterioration in its asset quality.

On 6 August, The Print reported that credit information bureau 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.

The law firm has sought information from all those HDFC bank shareholders who are looking to recover their losses in the bank’s securities.

A spokesperson of HDFC bank said, "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,"

Rosen Law Firm represents investors throughout the globe, concentrating its practice in securities class actions and shareholder derivative litigation.

Last year the law firm had prepared a class action lawsuit against Infosys after an anonymous whistleblower group accused the Infosys management of taking “unethical" steps to boost short-term revenue and profits.

Another litigation firm Schall Law Firm is also preparing for a class action suit against HDFC Bank.

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