HDFC Bank clears legal review, backs Sashidhar Jagdishan for third CEO term

MUMBAI: In a significant step towards reinforcing leadership stability, HDFC Bank has announced the conclusion of an independent legal review into allegations made by former chairman Atanu Chakraborty, with the findings clearing the way for the board to back chief executive officer and managing director Sashidhar Jagdishan for a third term.

The bank informed stock exchanges that the review, conducted by external law firms Wilson Sonsini Goodrich & Rosati and Wadia Ghandy & Co., found no evidence to substantiate concerns raised by Chakraborty in his resignation letter. The appointment of Jagdishan for another term will now be subject to approval from the Reserve Bank of India, with his current tenure ending in October.

The legal review spanned three months and involved examining thousands of documents, including board and committee meeting minutes, agenda papers and other records from the two years preceding Chakraborty’s resignation. The external firms also interviewed independent directors, committee chairpersons, senior management and Jagdishan himself.

According to the report, the review found no contemporaneous evidence supporting Chakraborty’s claims. It noted that board meeting minutes followed a comprehensive drafting and approval process that gave him ample opportunity to formally record any dissent or ethical concerns. Investigators also found no supporting evidence in board documents, internal communications or witness interviews.

The report further stated that although Chakraborty later referred publicly to the so-called Dubai matter, there was no contemporaneous evidence showing he had raised objections or disagreed with board decisions relating to that issue or any other matter during his tenure. The external law firms added that they repeatedly invited Chakraborty to participate in the review, but the interview ultimately did not take place.

For investors, the conclusion of the review removes a key governance overhang at a time when HDFC Bank continues to integrate its merger with HDFC Ltd. Leadership continuity is widely viewed as crucial as India’s largest private sector lender navigates operational integration, technology alignment and long-term business transformation following the landmark merger.

The board’s endorsement is an important milestone, but the final decision rests with the Reserve Bank of India, which will assess Jagdishan’s reappointment under its fit-and-proper criteria governing leadership appointments at private banks.

Separately, HDFC Bank is also in the process of appointing a new non-executive chairman to succeed Chakraborty. The appointment is expected to further strengthen the bank’s governance framework as it enters its next phase of growth.

With the independent review now complete and the allegations found to be unsupported by evidence, HDFC Bank has sought to draw a line under the issue while focusing on leadership continuity, governance and regulatory approval for its next chapter.