India’s HDFC Bank said Monday it will defend itself in the lawsuit filed against it in United States and denied the allegations in the suit.
The bank said it is aware of a complaint that was recently filed against the bank and its three employees in the United States.
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.
“The bank denies the allegations and intends to defend itself vigorously in the lawsuit. The bank expects its response to the lawsuit to be due in early 2021,” HDFC Bank said in a statement.
Three US law firms have announced class-action suits against HDFC Bank.
These firms — Rosen Law Firm, Schall Law and Pomerantz LLP — have alleged that the bank engaged in misleading statements and failed to inform investors about the bank’s improper internal controls on vehicle loans.
The lawsuit filed by Rosen Law Firm names the bank, HDFC Bank managing director and CEO Aditya Puri, CEO-designate Sashidhar Jagdishan and company secretary Santosh Haldankar as the defendants.
It said the lender has made false and misleading statements and failed to disclose to investors that it had inadequate disclosure controls and procedures and internal control over financial reporting.
As per the suit, bank officials engaged in a plan, scheme, conspiracy and course of conduct, pursuant to which they knowingly or recklessly engaged in acts, transactions, practices and courses of business, which operated as a fraud and deceit, resulting in the losses to investors.
The allegations pertain to the vehicle finance vertical where the bank later acknowledged to have found some improprieties, which resulted in some executives being acted against.