MUMBAI: With the regulatory radars of the Reserve Bank of India (RBI) and the Sebi on him, Atanu Chakraborty, the past part-time chairman of HDFC Bank, on Monday denied news reports that the real reason for his exit was the power struggle he had with the CEO. He also washed his hands off the huge pounding the country’s most valued bank has taken since his abrupt resignation.
Chakraborty resigned on March 18 more than a year ahead of his second term citing 'incongruence' with his values and ethics of certain developments in the bank in the last two years. HDFC Bank stock has lost a whopping 12% or Rs 1.52 lakh crore worth of investor money since then.
On the first day after the dramatic development, the stock, which is the most valued banking stock and also the second most valuable company in the country, plunged 9% intra-day and closed 5% down and the next day it closed another 2.5% lower and since then lost another 5%. This also led to Jefferies exiting the bank.
In an interview given to a news channel on Monday, Chakraborty said that the stock slump has nothing to do with his resignation. “I completely refute that there was value erosion of the bank’s stock on account of my resignation,” he said.
Chakraborty, the former financial services secretary and a batch mate of former RBI governor Shaktikanta Das, was very vocal about Sebi’s criticism of him. “I have only referred to what is in the public domain; if someone is using the word insinuation for my letter, they need to read the dictionary," he said.
Days after his resignation, Sebi chairman Tuhin Kanta Pandey said that independent directors need to behave in a more mature manner given their fiduciary responsibility to investors and the public at large.
Chakraborty also denied a Financial Times report that said the real reason for his departure was the power struggle with chief executive Sashidhar Jagdishan, and that he was against his reappointment that’s due next year.
Chakraborty had opposed extending Jagdishan's third term, even though the entire board favoured it, the report said.
"The matter of Jagdishan's re-appointment had not even come to the board for us to look into performance, or any issues; how could differences be there about something that had not even been discussed," Chakraborty said, adding the “personality clash issue has been overblown".
He also spoke about the "ethical congruence" that led to his resignation. Chakraborty said in the interview that “his resignation was not due to a single trigger but a growing sense of incongruence over two years.”