Hyderabad: India’s largest private sector lender HDFC Bank Ltd on Monday came under the scanner of a US-based law firm over allegations of issuing misleading business information to its investors.
Rosen Law Firm, which works for global investor rights, announced in a press release issued on Sunday that it is launching an investigation of potential securities claims on behalf of shareholders of HDFC Bank.
The potential lawsuit is being based on several media reports, one of which highlights HDFC Bank’s improper practices at its vehicle lending unit.
Reportedly, an internal audit by HDFC Bank revealed that the lender’s car loan customers were given GPS devices by bundling them in auto loans without their knowledge. This was in violation with the code of conduct and governance rules that prohibit the bank’s employees to indulge in non-financial businesses.
“On this news, HDFC Bank’s American depositary receipt price fell $1.37 per share, or 2.83%, to close at $47.02 per share on 13 July 2020,” Rosen Law noted in the statement.
The lawsuit is also taking into account a media report that said earlier this month that Experian Plc’s Indian unit had informed the Reserve Bank of India (RBI) that “HDFC Bank has been late in providing details of its loans, including the repayment status of its millions of retail borrowers” and that “[s]uch tardiness has been an issue for about two years”. Experian is a global information services company that provides data and analytical tools to investors across the world.