Aggrieved Credit Suisse AT-1 bondholder approaches EOW against HDFC Bank officials

HDFC Bank

A high-net-worth individual has lodged a complaint with the Nagpur branch of Economic Offences Wing (EoW) alleging misselling of additional tier - 1 (AT-1) bonds of Credit Suisse. The complaint names four HDFC Bank officials. Moneycontrol has seen a copy of the complaint.

HDFC Bank clarified that it is not in receipt of any summons on this issue so far.

One of the complainants,  Narendra Singru, a Senior Advisor at the Asian Development Bank is represented by AK and Partners. The law firm may also take up the complaints on behalf of other aggrieved Credit Suisse AT-1 bond holders. "More complaints are likely to be filed in Chandigarh and Gurgaon on this matter," said a person with knowledge of the development.

The EoW wing of the Nagpur Police has asked the complainant to appear before them as part of the inquiry.

The other aggrieved investors, apart from Singru, include Ashutosh Tiwary, CEO of MTN Guinea Bissau, Pankaj Sinha, Senior Director at Coca-Cola, and Varun Mahajan, Founder and Director of GARAVA Investment & Consulting Pvt. Ltd. Tiwary is currently based in South Africa and Mahajan is presently a resident of Dubai. The four investors are said to have invested around Rs 20-25 crore in the AT-1 bonds of Credit Suisse sold by HDFC Bank. "They were promised a return of 10-13 percent," said a source.

According to a report by Khaleej Times, an English daily published in Dubai, HDFC Bank may be facing regulatory scrutiny in the UAE for alleged mis-selling of Credit Suisse'sAT-1 bonds to investors, especially to non-resident Indians (NRIs) and high net worth individuals. Typically, the instrument is known to be a high-risk and high-yields product, though investors now battling against HDFC Bank claim they were sold these bonds without proper risk disclosure.