Mumbai, Aug 17 (IANS) As HDFC Bank faces a likely class action lawsuit by the US-based Rosen Law Firm, the bank said that the proposed lawsuit looks frivolous as the bank has been transparent with its disclosures.
The global investor rights law firm earlier announced an investigation of potential securities claims on behalf of the shareholders of HDFC Bank following allegations that the bank may have issued materially misleading business information to the investors.
An HDFC Bank spokesperson said: “We were unaware of any such development (class action lawsuit) till we heard about it from the media a little earlier today. We are getting details of it. We'll examine it and respond to it appropriately. Prima facie it does look frivolous as we believe we have been transparent in our disclosures.”
The firm's announcement of going ahead with a lawsuit came after reports in July said that HDFC Bank had conducted an investigation into the “improper lending practices and conflicts of interests” in its vehicle-financing arm.
The law firm's statement said that post the media reports, HDFC Bank's American depositary receipt price fell $1.37 per share, or 2.83 per cent, to close at $47.02 per share on July 13, 2020.
On July 19, 2020, the NYSE-listed HDFC Bank had reported its financial results for the first quarter of the Bank's 2021 fiscal year, missing analysts' estimates with respect to net profit and reporting a deterioration in its asset quality, the statement noted.
“Rosen Law Firm is preparing a securities lawsuit on behalf of HDFC Bank shareholders. If you purchased securities of HDFC Bank, please visit the firm's website at http://www.rosenlegal.com/cases-register-1922.html to join the securities action,” the law firm said.
The firm said that it represents investors throughout the globe, concentrating its practice in securities class actionsand shareholder derivative litigation.
Last year the law firm had filed a class action lawsuit against Infosys after an anonymous whistleblower group accused the software giant's management of “unethical” steps to boost short-term revenue and profits.