HDFC Bank Stock Falls 3% on SEBI Probe, Jefferies Exit

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AuthorRiya Kapoor|Published at:
HDFC Bank Stock Falls 3% on SEBI Probe, Jefferies Exit
Overview

HDFC Bank shares fell nearly 3% Friday as market regulator SEBI reviews former chairman Atanu Chakraborty's resignation letter for potential rule violations. Global brokerage Jefferies also exited its holdings shortly after the chairman's departure. The stock hit an intraday low of Rs 759.25 on the NSE.

SEBI Reviews Former Chairman's Letter

HDFC Bank shares fell nearly 3% on Friday following news that the Securities and Exchange Board of India (SEBI) has started a preliminary review of former part-time chairman Atanu Chakraborty's resignation letter. The stock touched an intraday low of Rs 759.25 on the National Stock Exchange (NSE).

Sources indicate SEBI's department for corporate disclosures and governance is examining the letter for potential violations of rules for directors at listed companies. The review aims to verify claims made in Chakraborty's letter. He had hinted at "certain happenings and practices within the bank" that he felt were not in line with his personal values and ethics, without offering further details.

Chakraborty stated he was unaware of any such examination. However, Reuters sources revealed SEBI is investigating whether other directors knew of material information and failed to document it, looking into alleged lapses in their duties. HDFC Bank has appointed external law firms to independently assess the concerns raised, though Chakraborty reported no contact from these firms.

Jefferies Exits Stake Amid Concerns

Global brokerage Jefferies has exited its stake in HDFC Bank, adding to the pressure. This move followed Atanu Chakraborty's resignation from the board, which occurred shortly after his resignation letter surfaced. The surfacing of the letter had previously caused an 8.7% stock drop, wiping out approximately Rs 1.35 lakh crore in market capitalization over three trading sessions. Jefferies also trimmed its overall India weightage, signaling broader caution among foreign institutional investors.

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