The law firm has named Aditya Puri, his successor Sashidhar Jagdishan, and company secretary Santosh Haldankar in the suit that seeks to recover damages for the lender’s investors under the US federal securities laws.
“HDFC Bank had inadequate disclosure controls and procedures and internal control over financial reporting; as a result, the Bank maintained improper lending practices in its vehicle-financing operations; accordingly, earnings generated from the Bank’s vehicle-financing operations were unsustainable; all the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Bank’s financial condition and reputation; and as a result, the Bank’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages,” the law firm said in a statement on its website.
Loopholes in HDFC Revealed
(1) HDFC Bank had inadequate disclosure controls and procedures and internal control over financial reporting;
(2) as a result, the Bank maintained improper lending practices in its vehicle-financing operations;
(3) accordingly, earnings generated from the Bank’s vehicle-financing operations were unsustainable;
(4) all the foregoing, once revealed, was foreseeably likely to have a material negative impact on the Bank’s financial condition and reputation; and
(5) as a result, the Bank’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
On Friday, HDFC Bank stock closed at Rs 1058.90 nearly 2.28% down.
