Atanu Chakraborty disowns HDFC MD, points to ‘deeper governance issues’ behind exit
hdfc bank Chairman Atanu Chakraborty, who quit the bank’s board on March 18 citing “incompatibility” between his values and some internal practices, has rejected managing director Shashidhar Jagadeesan’s claim that the action against staff over the sale of high-risk bonds to Gulf clients was unrelated to the boardroom dispute.In an interview with CNBC, Chakraborty said, “Incentive structures and oversight of management and the board must ensure that they are aligned with the interests of depositors, shareholders and the public at large.”
‘The letter mentions a major administrative issue’
In an interview to TOI, Jagadeesan had said that the action against employees over the AT-1 bond issue in Gulf coincided with the boardroom dispute and had nothing to do with the chairman’s exit.HDFC Bank had responded to Chakraborty’s resignation letter by appointing legal firms to look into the issues. “Appointment of law firms is a compliance requirement; my letter addresses a larger governance issue,” Chakraborty said, indicating that the bank has not acted on his letter.Expressing dissatisfaction over the bank’s action, he said, “Something went on for eight years and suddenly we take action.”“If you are addressing concerns like a five-page post-audit report, why should those things arise in the first place? Who will ensure that it never happens again? The rest ticks the boxes otherwise. What I am saying is to improve the level of thinking and root down your ethics and values. I find it strange that people are asking me to describe my concern over values and ethics,” he said.“We don’t dig wells after a fire. There is a need to avoid risky activities.” The stock has underperformed, with low CASA and low earnings ratio,” he said.Chakraborty denied that there was any issue over Jagadeesan’s reappointment. “The matter of re-appointment of Shashidhar Jagadishan did not come before the board to look into our performance or any issue; how can there be differences of opinion on something which was not even discussed?” He also indicated that the issue of relationships has been blown out of proportion. “Personality issues have been blown out of proportion,” he said.The former chairman rejected suggestions that his letter had caused HDFC Bank’s value to decline. He said, “I completely deny that my resignation has caused the fall in value.” He said that the Sensex has fallen due to disappointment over the Iran dispute and the Fed’s statement.Chakraborty said that there is no objection in the letter. “I have only referred to what is in the public domain; if someone is using the word obfuscation for my letter, they need to read the dictionary.” In the interview, the retired civil servant reiterated that he resigned because of a lack of coordination on ethics and values.“It is part of the duty of independent directors to address poor performance,” he said.“The benefits of the merger with parent company HDFC, the largest merger of its kind, are yet to fully materialize,” he said.