Lilavati Trust seeks suspension, prosecution of HDFC Bank CEO; bank refutes allegations as baseless

The Trust has alleged that senior officials at HDFC Bank facilitated the diversion of Rs 25 cr through a suspicious property transaction, failing to flag the transfer despite red alerts and allowing the closure of the account without a proper investigation. (Representative image)

The Lilavati Kirtilal Mehta Medical Trust has urged the Reserve Bank of India (RBI) and the Enforcement Directorate (ED) to immediately suspend and prosecute HDFC Bank CEO Sashidhar Jagdishan, accusing the bank of enabling fraud, according to a report by NDTV Profit.

In a letter dated June 5, the Trust alleged that senior officials at HDFC Bank facilitated the diversion of Rs 25 crore through a suspicious property transaction, failing to flag the transfer despite red alerts and allowing the closure of the account without a proper investigation.

The Trust's demand is supported by a May 30 order from a Mumbai Magistrate Court directing the Bandra police to register an FIR against Jagdishan and seven others.

"HDFC Bank’s MD and CEO Mr. Sashidhar Jagdishan is being targeted by unscrupulous persons who are abusing the legal process to thwart the recovery of the long outstanding loan due to the Bank from recalcitrant defaulters. The allegations made by Lilavati Trust, its Trustees and Officials against the Bank’s MD and CEO are baseless and malicious. The outrageous and preposterous allegations are strongly and categorically denied," said an HDFC Bank spokesperson.

"The Trustee, Prashant Mehta and his family members owe substantial amounts to HDFC Bank which were never repaid. Recovery and enforcement actions have been taken by the Bank over two decades and at every stage Prashant Mehta and his other family members have launched numerous vexatious legal actions. Having consistently failed at all levels including the Hon’ble Supreme Court, they have now resorted to the recent mala fide personal attacks on the Bank’s MD & CEO with the sole objective of intimidating and bullying the Bank and its MD & CEO from carrying out the mandate of recovering all outstanding loans in every possible manner permissible under law,"the spokesperson added.

"The Bank has obtained comprehensive legal advice and representation in this regard and is committed to pursuing legal remedies and options to defend its MD & CEO’s reputation. The Bank takes immense pride in the integrity and leadership of its MD & CEO. The Bank is confident that our judicial process will recognise the fraudulent intention and devious objectives of the Trustee and officials of Lilavati Trust of tarnishing the image of the Bank and its MD and CEO."

The FIR, reviewed by NDTV Profit, includes claims that Jagdishan received Rs 2.05 crore from a former Trust member to allegedly harass the father of a current trustee. This transaction was reportedly documented in a handwritten diary recovered by current Trust members.

The court noted that the conditions to initiate a criminal complaint had been met and instructed the police to gather further evidence. The Trust expressed concerns that former members might have destroyed additional proof.

This development follows a prior judgment by the Bombay High Court. On September 18, a division bench comprising Justices Bharati Dangre and Manjusha Deshpande dismissed a complaint filed by a Lilavati trustee to the State Minorities Commission.

The complaint alleged that harassment by HDFC Bank led to the death of the trustee’s father and the hospital's founder. The court deemed the complaint an attempt to avoid settling dues and stated that filing it before the commission was "nothing but an attempt to wriggle out of responsibilities."