The complaint targets CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan, claiming they funneled approximately 45 crore rupees—roughly $4.7 million—to the Maharashtra State Road Development Corporation. To bypass Reserve Bank of India regulations, the bank reportedly disguised these payments as marketing expenses for a road safety campaign. This maneuver allowed the bank to provide the state firm with an interest rate 2.51% above the standard retail market rate, while simultaneously inflating its own interest income figures.
HDFC Bank Faces Securities Fraud Lawsuit Over Hidden Payment Scheme
Investors who held HDFC Bank Limited shares between July 2023 and May 2026 have until October 13 to join a class action lawsuit. The litigation alleges that bank executives orchestrated a covert scheme to mask interest payments to a state-run entity, misleading shareholders about the company’s financial health and regulatory compliance.
The alleged deception began to unravel in March 2026 when independent director Atanu Chakraborty resigned, citing practices that clashed with his personal ethics. HDFC American Depositary Shares tumbled 7.28% following his departure. Further pressure mounted in May 2026 after an investigation revealed an internal probe into the leadership’s role in the scheme, triggering another 4.1% decline in share price. Hagens Berman, the firm leading the litigation, is now working to determine the full extent of the concealment and its impact on investors who suffered losses during the specified period.
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