Lilavati Trust flags regulatory breach in HDFC Bank CEO’s 'covert' appointment by disputed trustee

Lilavati Trust

Lilavati Kirtilal Mehta Medical Trust, on July 10, flagged a regulatory breach in the “covert” appointment of HDFC Bank’s Chief Executive Officer Sashidhar Jagdishan by a disputed trustee.

The Trust also furnished a concealed appointment letter dated February 2, 2022, revealing that Jagdishan was made financial advisor to the Trust “without the knowledge, consent, or ratification of its Permanent Trustees Kishor Mehta and Charu Kishor Mehta”.

The Lilavati Trust’s release said that, as far as the Trust knows, neither the board of HDFC, SEBI, the RBI Governor, nor the Finance Ministry was aware of this “clandestine” appointment.

The appointment letter released by the Trust said, “We are pleased to inform you that the Board of Trustees has appointed you as the Financial Advisor to the Lilavati Kirtilal Mehta Medical Trust. Kindly treat this letter as the official confirmation of your appointment. We look forward to your valuable guidance and expertise in financial matters.”

An email sent to HDFC Bank remained unanswered till the time of publishing this report. The report will be updated when the bank responds.

“It is further proof of how internal mechanisms were manipulated to allow external influence and enable unchecked financial actions to keep Chetan Mehta and his illegal board in power. This is not financial advice, this is an abuse of position, and part of a broader conspiracy to erode the Trust’s operations from within,” Prashant Mehta, Permanent Trustee of Lilavati Kirtilal Mehta Medical Trust, was quoted as saying in the release.

The statement comes at a time when the Trust has made a series of allegations against Chetan Mehta, his associates and HDFC Bank’s Jagdishan of multiple financial irregularities and alleged criminal activities.

The accusations

The Trust has accused Jagdishan of accepting a bribe of Rs 2.05 crore to help a group consisting of Chetan Mehta and other erstwhile trustees retain illegal control over the Trust. The Trust claimed that the payment was documented in a handwritten cash diary, which had been seized.

Further, the Trust accused Jagdishan of facilitating an illegal deposit of Rs 25 crore of the Trust’s funds into an HDFC Bank account without any board resolution, trustee approval or proper oversight, as per media reports. According to the Trust, these financial actions reflect a serious breach of governance norms and raise concerns about complicity at the bank.

In another allegation, the Trust claimed that Rs 1.5 crore was disbursed to hospital staff under the pretext of CSR donations from HDFC Bank, but alleged it was a bribe to suppress information leaks and internal conflict over the wrongdoing, according to media reports.

HDFC Bank, in a release on June 8, said that the bank once again unequivocally rejects and strongly condemns the malicious and baseless allegations levelled and maintains that these allegations are completely false, outrageous, and constitute a gross misuse of the legal process.

“The Bank firmly believes that these actions are a deliberate attempt to obstruct and undermine legitimate recovery proceedings related to substantial long-outstanding dues owed by Splendour Gems Limited,” HDFC Bank had said in a release.