HDFC Bank crisis: Investors in the dark despite repeated reassurance

HDFC group veteran Mistry seemingly borrowed words from Chakraborty’s statement to refute it. Mistry said he would not take on the responsibility of chairing the lender “if the systems, processes, governance practices in the bank did not align with my principles and my level of integrity.”Mistry, 71, told reporters on a separate call that the bank management will speak to all major shareholders over the next one or two days to address their concerns.

Jagdishan said every board member tried to persuade Chakraborty to stay back, or at least soften the language used in his resignation letter.As investors struggled to figure out whether to trust the former chairman’s allegations or the new chairman’s assurance, corporate governance experts demanded more accountability.“The board should constitute a committee of independent directors to look into the matter and put out a detailed statement to assuage investor concerns,” said Shriram Subramanian, founder of proxy advisory firm InGovern Research Services. By making certain allegations, Chakraborty has done more harm than good to the investors, he said.

“He should have explained in much more detail. The onus is on Chakraborty, as instead of writing those one or two lines in his resignation letter, he could have substantiated his allegations."The market did not take it well.

Shares of HDFC Bank touched an intraday low of ₹772 on the BSE, down 8.4%, before closing at 799.7 or 5.1% lower than Wednesday’s close. The broader market was down 3.26%, with Sensex closing at 74,207.24.A couple of hours after the investor call, the Reserve Bank of India stepped in with reassurance.