A day after HDFC Bank Non-Executive Chairman Atanu Chakraborty quit, the bank’s Interim Chairman Keki Mistry Thursday said there has been no power struggle within the bank and there has been no discussion with regards to governance within the board of directors.
Stating that the board is united, Mistry said the board had not witnessed “any kind of complete difference in opinion” in its meetings.
“I think to my mind there could be a relationship issue between him and management. That may have been manifested over a period of time,” Mistry said in a conference call with analysts. “The board will meet soon and take a call on what to do next,” he said.
The bank’s shares fell five per cent to Rs 800 in intra-day trading on the BSE on Thursday morning.
“Differences on minor issues do come up from time to time but there was nothing material whatsoever. In no board meeting has there been any kind of complete differences of opinion or anything of that sort. And the board minutes will reflect that,” he said.
“Relationship, I mean human beings are human beings. There will always be some relationship issue between individuals. Those kind of things happen. There was no power struggle in the bank. The bank works, the entire bank, the management team in the bank works as a cohesive unit and to my mind will continue to work as a cohesive unit,” Mistry said.
Chakraborty resigned saying that “certain happenings and practices within the bank are not in congruence with my personal values and ethics”. “None of us as board members are aware of what are the specific issues which Chakrabarty wrote in his letter. The board members asked him yesterday and he did not give any specific explanation,” Mistry said.
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“There were no specific happenings and practices that were brought to our attention. There were no specific operational or other issues that have been highlighted. The board’s oversight mechanism remains fully operational and our collective commitment to protecting the interests of the institution, depositors, shareholders and all stakeholders is completely and totally unwavering,” he said.
He said Chakraborty’s resignation has nothing to do with operational profitability of bank. Mistry was appointed as Interim Chairman for three months following Chakraborty’s resignation from the board on Wednesday.
“Management team does and will continue to work in cohesive manner,” he said, adding that regulators RBI and Sebi were fully informed. “The RBI is fully in the loop and they are comfortable what is going on in the bank,” he said.
“I would never remain on the board if there were any issues with governance,” Mistry said. “The bank has very strong on ethics.” Reassuring investors and stakeholders, he said there were “no material matters at this point of time” and that the board remained committed to “safeguarding investor confidence”.
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“The board would reexamine organisation structure as we move forward,” the bank’s CEO Shashidhar Jagdishan said.
“When this thing happened yesterday evening, the first thing the board members did — the people who were in Mumbai — they met the RBI. The RBI gave their approval for making me interim chairman for a period of 3 months to get stabilising and then that’s about it. And differences of opinion, differences of views may always be there between individuals but there was nothing. I received nothing substantive, nothing whatsoever,” Mistry said.
“And as far as our seeking some explanation from Chakraborty, the board will of course meet very, very soon and take a call on how to deal with the problem,” he said.
Meanwhile, sources said neither the RBI nor the bank has initiated or directed his exit, describing it instead as a personal decision. The underlying friction arose from Chakraborty’s style functioning despite his non-executive role, with his exit ultimately tied to personal differences with senior management.
Although tensions between Chakraborty and the board had been building over time, his resignation came as a surprise. A board meeting was convened at short notice, during which Keki Mistry was asked to step in temporarily to ensure stability until a new chairman is appointed.
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The board will follow the due procedure to select the Chairman, Mistry said.
Chakraborty did not provide specific reasons beyond those mentioned in his resignation letter. However, sources indicated he may have had concerns about the conduct of certain individuals, who are in the middle level, linked to past lapses at the bank. However, it remains unclear whether these concerns were formally raised or documented internally.
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