HDFC Bank Review Clears Governance Claims After Chairman Resignation

Managing Director and CEO Sashidhar Jagdishan described the March 18 resignation of part-time chairman Atanu Chakraborty as a challenging event that raised questions about corporate governance at HDFC Bank. Chakraborty resigned citing internal practices and happenings that conflicted with his personal values and ethics, later suggesting a dispute over the alleged mis-selling of Credit Suisse perpetual bonds.

In response, HDFC Bank established a special committee of independent directors to oversee an independent legal review conducted by US-based Wilson Sonsini Goodrich & Rosati and Indian firm Wadia Ghandy & Co. The investigation involved reviewing board minutes and communications from the previous two years and conducting witness interviews. Jagdishan noted that the review was partially necessitated because the bank's American Depositary Receipts are listed on the New York Stock Exchange.

On June 26, the bank announced that the review found no basis for Chakraborty's claims. Jagdishan stated that the implications of the resignation letter were not substantiated by reviewed records or interviews, and noted that Chakraborty declined to participate in the process. Chakraborty dismissed the inquiry as a superfluous exercise, stating he refused to participate because the bank would not disclose the terms of reference.

Following an interim period under Keki Mistry, the bank appointed former Chief Election Commissioner Rajiv Kumar as part-time chairman on June 29, pending approval from shareholders and the Reserve Bank of India.