Shares of HDFC Bank fell more than 1% in early trade on Friday after three US law firms announced separate investigations into whether India’s largest private sector lender may have violated US federal securities laws.
The investigations were announced by the Law Offices of Howard G. Smith, the Law Offices of Frank R. Cruz, and Glancy Prongay Wolk & Rotter in separate investor notices.
According to the firms, the investigations are examining whether HDFC Bank and certain executives made materially misleading statements or failed to disclose information relevant to investors, potentially violating US federal securities laws.
The investigations stem from a May 27 report that alleged HDFC Bank made payments of about ₹45 crore to the Maharashtra State Road Development Corporation (MSRDC) to attract large institutional deposits. The report further alleged that the payments were recorded as marketing expenses and that the bank’s chief executive officer was aware of them. The allegations remain unproven.
The law firms said HDFC Bank’s American Depositary Receipts (ADRs) fell $1.02, or 4.1%, to close at $23.78 on May 27 following publication of the report.
The firms have invited investors who suffered losses in HDFC Bank ADRs to contact them as they assess whether there are sufficient grounds to pursue securities-related claims.
No securities class action lawsuit has been filed against HDFC Bank at this stage. The investigations are preliminary and are intended to determine whether legal action is warranted.
On the BSE, HDFC Bank shares declined as much as 1.44% during early trade on Friday. The stock has fallen more than 25% over the past year, nearly 20% over the last six months, and about 25% so far in the current calendar year.
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