US law firm to investigate HDFC Bank’s securities claims on behalf of investors

US-based Rosen Law Firm said late on Sunday night that it will launch an investigation of potential securities claims on behalf of shareholders of HDFC Bank.

The firm cited media reports about the bank’s probe into malpractices at its vehicle-financing arm, its financial underperformance in Q1FY21 and delayed reporting to a credit bureau.

“Rosen Law Firm, a global investor rights law firm, announces an investigation of potential securities claims on behalf of shareholders of HDFC Bank resulting from allegations that HDFC Bank may have issued materially misleading business information to the investing public,” the firm said on its website.

Rosen invited the bank’s shareholders to join a securities lawsuit it is preparing against the bank.

Reports of the bank’s Q1 performance led to its American depositary receipt price falling $1.37 per share, or 2.83%, to close at $47.02 per share on July 13, 2020, Rosen said.

HDFC Bank said that it was unaware of the development till media outlets reached out to it for a response on the matter.

“We are getting details of it. We’ll examine it and respond to it as appropriate. Prima facie it does look frivolous as we believe we have been transparent in our disclosures,” the bank said on its official Twitter handle.

There have been multiple reports about malpractices by HDFC Bank in the last few months, including one about the lender forcibly selling GPS devices to its auto-loan customers.

The bank has consistently said that it carried out a probe into allegations of misdemeanours at its auto-loan division and took appropriate disciplinary action.
Ashok Khanna, who headed the auto-loan division and participated in the enquiry, retired on March 31 on expiry of his tenure, as per the original terms of employment, the bank’s outgoing managing director Aditya Puri said last month.

On Monday, HDFC Bank’s shares ended almost flat on the BSE at Rs 1,033.55.