Rosen Law Firm, a US-based global investor rights law firm, has announced that it is preparing a class action securities lawsuit on behalf of HDFC Bank shareholders and has asked those who have purchased their securities to join the securities action on their website.
The firm said that an investigation is being conducted on allegations that the private lender may have issued materially misleading business information to the investing public.
On 13 July 2020, The Economic Times reported that HDFC Bank had "conducted a probe into allegations of improper lending practices and conflicts of interests in its vehicle-financing operations involving the unit's former head." Consequently, HDFC Bank's American depositary receipt price fell $1.37 per share, or 2.83 percent, to close at $47.02 per share that day.
The improper lending practices charges include the bank's executives forcing borrowers to buy GPS devices bundled with auto loans, according to media reports.
Rosen Law further alleged that on 19 July 2020, when HDFC Bank reported its financial results for the June ended quarter, the results were missing analyst estimates with respect to net profit and reporting a deterioration in its asset quality.
Then, on 6 August 2020, The Print reported that in July 2020, Experian Plc's Indian unit had informed the Reserve Bank of India that "HDFC Bank has been late in providing details of its loans, including the repayment status of its millions of retail borrowers" and that "[s]uch tardiness has been an issue for about two years."
The American Law Firm has called up investors of HDFC Bank to contact them on information regarding the lawsuit. "A representative of The Rosen Law Firm will contact you at no cost to you and provide you detailed information concerning the proposed class action to recover your losses in HDFC Bank Limited securities," it says on its website.
Shares of HDFC Bank were trading nearly 1 percent lower on Monday.