HDFC Bank has denied allegations made against the bank in two class-action suits slapped by two law firms in the US. Rosen Law Firm and Schall Law Firm for making false and misleading statements and seek to recover damages.
In a clarification on Monday, HDFC Bank said that it is aware of a complaint that was recently filed against the bank and its three employees in the US and that it intends to defend itself vigorously in the lawsuit.
“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 2020,” the bank informed the stock exchanges.
HDFC Bank said that it expects its response to the lawsuit to be due in early 2021.
“Since the lawsuit is at a premature stage, there is no matter at this point of time which requires disclosure as per Regulation 30 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. We trust this clarifies,” the bank further added.
The lawsuit by Rosen Law Firm alleged that the bank made false and misleading statements over the past year and failed to disclose to investors that it didn’t have adequate disclose controls and procedures in place and that the bank maintained improper lending practices in its vehicle financing operations as a result of this.
The other lawsuit, filed by Schall Law Firm, alleges that the bank violated sections of the Securities Exchanges Act and a rule of the US Securities and Exchange Commission and makes similar allegations about failing to have adequate disclosure controls.
Both lawsuits allege that when the market learned the truth about HDFC Bank, investors suffered damages.
The lawsuits name managing director Aditya Puri, CEO-designate Sashidhar Jagdishan, and company secretary Santosh Haldankar Individually and ‘on behalf of all others’.
Mint reported in July that the bank’s car loan customers were allegedly forced to buy a vehicle tracking device for four years (2015-2019). The report said that executives of the bank pushed loan customers to buy GPS devices priced between Rs 18,000 and Rs 19,500.