HDFC Bank asks 3 senior executives to leave over 'mis-selling' of Credit Suisse AT1 bonds

HDFC Bank

HDFC Bank has asked its three top executives to leave the company for their alleged involvement in mis-selling of Credit Suisse’s Additional Tier 1 bonds, sources have told Moneycontrol.

The bank terminated services of Sampath Kumar, group head of branch banking, Harsh Gupta, executive vice president, Middle East, Africa, and NRI onshore business, and Payal Mandhyan, senior vice president as the probe into alleged mis-selling continues, sources said.

It is not known when they were asked to leave. HDFC Bank did not reply to Moneycontrol’s queries.

Attempts were made to reach out to all three executives via LinkedIn. This story will be updated as and when they reply.

The news come two days after the bank's part-time chairman Atanu Chakraborty resigned abruptly over differences in “values and ethics”.

HDFC Bank is investigating allegations that its Dubai branch mis-sold high-risk AT-1 bonds. A complaint alleged that the bank marketed these high-yield instruments as "safe-haven" investments to unsuspecting retail customers.

These bonds were written off after Credit Suisse went bankrupt and was taken over by another banking giant, UBS.

The Dubai Financial Services Authority (DFSA) banned HDFC Bank from onboarding new customers due to failures in the sales process of these complex, and high-risk securities.

Moneycontrol reported in July that a high-net-worth individual had filed a complaint with the Nagpur branch of the Economic Offences Wing (EoW), which named four HDFC officials.

Bloomberg reported in October that India's biggest private sector lender had sent two of its executives on "gardening leave" as part of the mis-selling probe.

The HDFC Bank share closed at Rs 781, down 2.2 percent from the previous day, extending losses for a second day following Chakraborty’s resignation. The stock has lost around 7 percent in two days.