IndusInd Bank's former CFO Gobind Jain has urged the Centre to remove Sunil Mehta, the Chairman of the lender's board, alleging his involvement in covering up the accounting discrepancies which the bank had earlier reported, the Economic Times reported.
The shares of lender dropped over 1 percent on September 4 to trade at Rs 760 apiece.
Jain had resigned as the Chief Financial Officer of IndusInd Bank in January, months before the lender said that it has found some accounting discrepancies in its derivatives portfolio. In August this year, he wrote a letter to Prime Minister Narendra Modi, claiming that he has uncovered serious issues in the treasury operations at the bank which has persisted for more than a decade, the Economic Times reported. In his letter cited by the newspaper, Jain said he was the only executive to detect the lapses and had fought a "lone battle" to highlight them.
Jain said Mehta and his close aides created an "atmosphere of fear" within IndusInd Bank and targeted Jain for exposing the problem while shielding those responsible, the report further quoted him as saying.
The bank has however denied all the claims made by Jain, calling them baseless and motivated. The lender in a statement to the newspaper highlighted that its board promptly disclosed accounting discrepancies to stock exchanges, appointed external agencies for independent audits, reported suspected frauds to RBI and filed necessary complaints.
Moneycontrol couldn't independently verify the report.
IndusInd Bank had earlier announced that there were certain accounting lapses in the derivatives portfolio which could have a negative impact of 2.35 percent of the bank’s net worth, as of December 2024.
This sent the shares of the lender to a tail spin, with the stock falling 26 percent in a single day and wiping off major sums of investors' wealth.
Its then CEO Sumant Kathpalia resigned in April as an aftermath of the crisis. The RBI later issued a statement, saying that IndusInd Bank remains "well-capitalised and the financially position remains satisfactory". RBI Governor Sanjay Malhotra said India's banking system remains "safe and secure" and described IndusInd Bank's accounting lapses and restrictions on New India Cooperative Bank as "episodes" and not "failures".
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