HDFC CEO hit with FIR—Is bank's market run in trouble?
What's the story
HDFC Bank's Managing Director and CEO, Sashidhar Jagdishan, has been named in a police complaint filed by the Mehta family through its Lilavati Kirtilal Mehta Medical Trust.
The trust runs Mumbai's Lilavati Hospital.
The complaint alleges that Jagdishan received ₹2.05 crore from a former trustee of the LKMM Trust to harass the father of a current trustee.
HDFC has dismissed the complaint as "malicious and baseless," prompting investors to closely watch stock behavior.
Evidence
Evidence presented in court
The Mehta family claims that the alleged payment is documented in a handwritten diary, which has been presented as evidence.
They also alleged in court that other crucial evidence may have been destroyed by former trustees.
The court found grounds for the FIR and directed authorities to proceed with the investigation into these serious allegations of financial fraud against Jagdishan.
Bank's response
HDFC Bank denies allegations
In an official statement, HDFC Bank has vehemently denied the allegations against Jagdishan.
The bank called them "malicious," "baseless," and a "gross misuse of the legal process."
It clarified that the complaint pertains to an old loan recovery case involving Splendour Gems (formerly Beautiful Diamonds), a company promoted by Kishor Mehta.
As of May 31, 2025, dues from this firm stood at ₹65.22 crore with a recovery certificate issued by Debt Recovery Tribunal (DRT) in 2004.
Legal history
Complaint amid family dispute
HDFC Bank also revealed that members of the Mehta family have filed multiple legal and criminal complaints in response to recovery proceedings.
Most of these complaints, according to the bank, have either been dismissed or are currently under legal challenge.
The complaint against Jagdishan comes amid a wider dispute within the Mehta family over control of the LKMM Trust.
Audit findings
Forensic audit initiated by Mehta faction
The complaint against Jagdishan emerges against the backdrop of an ongoing power struggle within the Mehta family—between the descendants of Kishor Mehta and Vijay Mehta—over control of the Lilavati Kirtilal Mehta Medical Trust.
In 2023, following an extended legal battle, the Kishor Mehta faction assumed control of the trust and launched a forensic audit.
The audit allegedly uncovered financial irregularities, including a suspected diversion of ₹1,200-1,500 crore and unverified claims of occult practices at the hospital.
Market watch
Should HDFC Bank shareholders be watchful?
At the time of writing, HDFC Bank shares were trading at ₹1,982.6, up by 0.2% from Friday's close.
Investors may remain cautious, as the allegations could escalate regulatory scrutiny.
Noted analyst commentary suggests HDFC may weather this challenge, with robust earnings and an 11% year-to-date gain underlining investor confidence.
Yet, ongoing legal battles may influence trading sentiment and valuation in the near term.