“In sum, the contemporaneous evidence reviewed was inconsistent with Chakraborty’s statement, and external law firms’ review did not identify any basis for the statement,” the bank said.
In March, Chakraborty suddenly resigned, with his letter from 17 March to the board citing “certain happenings and practices within the bank” that were “not in congruence” with his personal values and ethics. He did not elaborate. Days later, he went on national television to hint that the “mis-selling” of Credit Suisse’s perpetual bonds was a bone of contention between him and the bank’s management.
Law firms Wilson Sonsini Goodrich & Rosati and Wadia Ghandy & Co conducted the legal review. HDFC Bank said that the terms of reference for the review defined the relevant time period as the two years preceding Chakraborty’s resignation and included, among other procedures to be performed, reviewing meeting minutes and agenda papers, conducting interviews, and reviewing additional documents and information.
Chakraborty told CNBC TV18 in an interview on 30 March that while he typically avoids sharing any boardroom discussions, in this case, the issue had been discussed in public by chief executive Sashidhar Jagdishan.
With the legal review out of the way, the bank’s board is likely to take a call chief executive Jagdishan’s reappointment. Mint reported on 8 June that HDFC Bank’s board will consider Jagdishan’s reappointment only after it receives the findings of the legal review, and that the report is expected by the end of June.
Jagdishan, 61, who joined the bank in February 1996, will come up for a reappointment as his current term ends in October.
On Friday, the bank said that external law firms conducted a thorough and objective review of Chakraborty’s statement. It said that the legal review was conducted over a three-month period and involved the review of thousands of documents and interviews of the independent directors and several members of senior management.
“The bank and external law firms repeatedly requested that Chakraborty speak with external law firms as part of the legal review, but ultimately, the interview with Chakraborty did not occur. Having now completed an extensive legal review, external law firms found that Chakraborty’s statement and its implications were not substantiated by the record and witness interviews,” it said.
According to the statement, the minutes of the meetings Chakraborty attended were a product of a comprehensive drafting, review and approval process that him an opportunity to record any “happenings and practices” that purportedly were not in congruence with his personal values and ethics.
Moreover, no contemporaneous support for Chakraborty’s statement was found in the board or board committee minutes or materials reviewed, or in contemporaneous communications about the review and approval of the minutes of meetings he attended, it said.
“Witness interviews did not support or substantiate the statement; and although Chakraborty referred to the Dubai matter in post-resignation public statements, no contemporaneous evidence was identified reflecting that he raised any concerns about his personal values and ethics, or that he disagreed with any decisions made by the Board or relevant Board Committees, in connection with the Dubai matter (or any other matters that the Board and those Committees addressed).”
