New Delhi, July 24 (IANS) Shares of India's largest private sector lender, HDFC Bank, fell more than 1 per cent in early trade on Friday after three US law firms announced separate investigations into whether the bank may have violated federal securities laws.
The investigations were announced by the Law Offices of Howard G. Smith, the Law Offices of Frank R. Cruz and Glancy Prongay Wolke & Rotter through separate press releases.
According to the law firms, the investigations are focused on whether HDFC Bank and certain of its executives made materially misleading statements or failed to disclose information relevant to investors, potentially violating US federal securities laws.
The probes stem from a May 27 report by The Indian Express -- which alleged that HDFC Bank made payments of about Rs 45 crore (Rs 450 million or around $4.7 million) to the Maharashtra State Road Development Corporation (MSRDC) to attract large institutional deposits.
The report also alleged that the payments were booked as marketing expenses and that the bank's Chief Executive Officer was aware of them.
According to the law firms, HDFC Bank's American Depositary Receipts (ADRs) fell $1.02, or 4.1 per cent, to close at $23.78 on May 27 following the publication of the report.
The firms have invited investors who suffered losses in HDFC Bank ADRs to contact them and share relevant information as they assess whether there are sufficient grounds to pursue securities-related claims.
However, no securities class action lawsuit has been filed against HDFC Bank at this stage. The investigations are preliminary and are intended to determine whether legal action is warranted.
However, the lender has not issued any statement on the matter to the stock exchanges -- the NSE and the BSE -- till 10:30 am.
On Friday, HDFC Bank shares fell as much as 1.44 per cent during early trade on the BSE. The stock has declined more than 25 per cent over the past one year, nearly 20 per cent in the last six months, and around 25 per cent so far this calendar year.
--IANS
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