HDFC Bank says CEO Sashidhar Jagdishan falsely targeted by ‘unscrupulous’ people, refutes Lilavati Trust allegations

HDFC Bank Ltd has stressed that managing director and chief executive officer (MD&CEO) Sashidhar Jagdishan is being targeted by ‘unscrupulous individuals’ who are abusing the legal system to obstruct the recovery of the long-outstanding loan owed to the bank, and that the accusations of financial fraud made by Lilavati Trust against him are baseless and malicious. 

At a press conference on Saturday, 7 June, the officials of Lilavati Kirtilal Mehta Medical Trust, which operates the Lilavati Hospital in Bandra, Mumbai, sought Jagdishan's suspension and prosecution over his alleged involvement in financial fraud and corruption related to the trust.

Apart from Jagdishan, Lilavati Trust has accused eight individuals, including former bank employees, of financial fraud and misappropriation of the trust's funds. HDFC Bank has vowed legal action to defend its CEO's reputation. 

HDFC Bank reacts

Responding to Lilavati Trust's allegations, HDFC Bank issued an official statement denying the CEO's involvement in the fraud.

“The allegations made by Lilavati Trust, its trustees and officials against the bank’s MD and CEO (managing director and chief executive officer) are baseless and malicious. The outrageous and preposterous allegations are strongly and categorically denied,” said the bank's spokesperson in the statement. 

The spokesperson also said that Jagdishan was being “targeted” to prevent the recovery of the long outstanding loan due to the bank from uncooperative defaulters. 

Allegations against Prashant Mehta

HDFC Bank further claimed that Prashant Mehta, trustee of Lilavati Hospital, and his family members owed a huge sum of money to the bank, which was never repaid.

“Recovery and enforcement actions have been taken by the bank over two decades and at every stage Prashant Mehta and his other family members have launched numerous vexatious legal actions,” said the bank.

The bank accused Mehta of pursuing legal actions over the bank's attempts to recover the amount. Additionally, the bank claimed that Mehta used mala fide personal attacks on Jagadish aimed solely at intimidating and bullying the bank and its CEO. 

What's next?

HDFC Bank also highlighted its intention to take legal action.

“The Bank has obtained comprehensive legal advice and representation in this regard and is committed to pursuing legal remedies and options to defend its MD & CEO's reputation. The Bank is confident that our judicial process will recognise the fraudulent intention and devious objectives of the trustee and officials of Lilavati Trust of tarnishing the image of the Bank and its MD and CEO,” reported the news portal CNBC-TV18, citing the bank. 

On Saturday, the trust alleged that Jagdishan “enabled the illegal control and siphoning of public charitable funds by a rogue trustee group”. It said that founder and permanent trustee for life Kishor Mehta “was subjected to over 100 legal summonses before his death”, an outcome the trust alleged was a “direct result of legal harassment and mental torture.”

“The allegations made by Lilavati Trust, its trustees and officials against the bank’s MD and CEO are baseless and malicious. The outrageous and preposterous allegations are strongly and categorically denied,” the bank's spokesperson said.

Meanwhile, Prashant Mehta, a permanent trustee of Lilavati Kirtilal Mehta Medical Trust, said that it was “not a private feud or a commercial misunderstanding”.

Per a Hindustan Times report on 25 September 2024, the Bombay high court struck down proceedings initiated by the Maharashtra State Minorities Commission against some senior executives of the HDFC Bank, following a complaint lodged by Rajesh Mehta, a trustee of Lilavati Kirtilal Mehta Medical Trust. The report said that the complainant alleged that severe harassment and mental torture by the bank management and recovery department led to the death of his father Kishor Mehta.