'Shalabh Saxena can't be relieved immediately', IndusInd Bank responds to Spandana Sphoorty announcement

A day after Microfinance institution (MFI) Spandana Sphoorty issued a press statement announcing the appointment of Shalabh Saxena as the new managing director and Ashish Damani as new chief financial officer (CFO), IndusInd Bank responded saying the duo can't be relieved from its subsidiary immediately.

Saxena is presently the CEO of Bharat Financial Inclusion Ltd, a subsidiary of IndusInd Bank and Damani is the CFO of the company. Spandana Sphoorty announced the appointment of the duo at top posts after the exit of founder and CEO Padmaja Reddy.

"Neither, Mr. Shalabh Saxena nor Mr. Ashish Damani have tendered their resignation from the services of BFIL. As per the terms of their employment, once the resignation is tendered, it is subject to acceptance by the Board of Directors of BFIL (Board)," IndusInd Bank said.

"Upon acceptance by the Board, a specified notice period is also required to be served. However, as neither of them have tendered their resignations to BFIL, such due process has not been initiated," the bank said in a statement issued to exchanges.

Moreover, as per their contractual terms of employment, Shalabh Saxena and Ashish Damani are also prohibited from accepting employment at a competitor of BFIL (such as SSFL), unless approved in writing by the Board of BFIL, the bank said.

"As stated above, as resignation from BFIL has not been tendered to the Board by Mr. Shalabh Saxena and/or Mr. Ashish Damani, any purported acceptance by them of employment at SSFL would be in contravention of the terms of their employment with BFIL." the bank said.

Also, the bank added that certain transactions relating to BFIL are subject matter of an ongoing review and the continued employment of Shalabh Saxena and Ashish Damani at BFIL is critical to the closure of such a process.

"Accordingly, they cannot be relieved from the services of BFIL, until completion of the said review," IndusInd Bank said.

In light of the above, BFIL and the Bank are in the process of evaluating and undertaking appropriate steps and actions, including strengthening the management of BFIL to continue its usual business operations under the able guidance of its management and the Bank, IndusInd bank said.