1. 🧩 HDFC Bank to Launch Legal Battle: FIR Filed in Lilavati Trust Dispute
On May 30, 2025, a Mumbai magistrate ordered Bandra police to file FIR No. 818/2025 against Sashidhar Jagdishan, naming him and seven others in an alleged financial fraud case, connected to the Lilavati Kirtilal Mehta Medical Trust (LKMM Trust) x.com+14outlookbusiness.com+14economictimes.indiatimes.com+14economictimes.indiatimes.com+11business-standard.com+11economictimes.indiatimes.com+11.
The Trust claims Jagdishan received ₹2.05 crore—part of a larger ₹14.42 crore misappropriated sum—to “harass the father of a current trustee.” These allegations stem from a broader clash between Mehta family factions over control of Lilavati Hospital’s trust funds outlookbusiness.com+6indianexpress.com+6m.economictimes.com+6.
2. ⚖️ HDFC Bank’s Strong Rebuttal & Legal Strategy
Immediate Response:
HDFC Bank to Launch Legal Battle, calling the allegations “baseless, malicious, outrageous and preposterous.” The bank stressed that Jagdishan is being unfairly targeted in an orchestrated effort to disrupt long-standing loan recovery cases economictimes.indiatimes.com+15livemint.com+15thestatesman.com+15.
Legal Position:
- The bank asserts that the Mehta family and trust owe ₹65.22 crore (including interest) stemming from a 1995 loan to Splendour Gems (Mehta-owned), bolstered by a DRT recovery certificate from 2004 hindustantimes.com+3m.economictimes.com+3business-standard.com+3.
- It describes a two-decade-long recovery journey, consistently stalling due to frivolous legal actions initiated by Mehta family members—even reaching the Supreme Court financialexpress.com+11business-standard.com+11hindustantimes.com+11.
Next Legal Moves:
- Bank has sought comprehensive legal advice and will pursue all available remedies to clear the record and protect Jagdishan’s reputation legal.economictimes.indiatimes.com+15livemint.com+15businesstoday.in+15.
- It is confident that judicial scrutiny will expose this as a retaliatory campaign by defaulters to derail lawful recovery efforts hindustantimes.com+1livemint.com+1.
3. 🔍 Core Contention Points
| Allegation by Trust | HDFC Response |
|---|---|
| ₹2.05 crore received to harass trustee’s father | Denied as malicious framing; said allegation linked to overdue loan recovery, not criminal intent financialexpress.com+10business-standard.com+10m.economictimes.com+10 |
| ₹14.42 crore trust funds misappropriated | Bank sees it as deflection from actual issue—non-payment of dues |
| HDFC Bank to Launch Legal Battle. Calls for Jagdishan’s suspension, FIR and prosecution | Rejected: Bank defends his integrity and decries attempts to intimidate |
| Alleged violations of RBI “Fit & Proper” norms and CSR misuse | Bank argues accusations are strategic lawsuits to pressure and delay recovery |
4. đź“Š Market & Governance Impact
- Stock Reaction: HDFC shares edged up 1.4%, closing at ₹1,978.70 on June 6, 2025, as investors gained confidence from the bank’s firm stance livemint.com.
- Corporate Governance: With the RBI’s “Fit & Proper” framework under scrutiny, the bank emphasized that Jagdishan’s continued service aligns with robust regulatory standards economictimes.indiatimes.com+15financialexpress.com+15indianexpress.com+15.
5. 🚨 Why It Matters
- Reputational Stakes: Jagdishan represents the first post-Puri MD & CEO at India’s second-largest private lender—his public integrity matters deeply.
- Legal Precedent: This could shape how recovery disputes intersect with defamation and legal retaliation.
- Regulatory Insight: RBI, SEBI, and Ministry of Finance are being urged by the Trust to review high-level banking governance—raising questions about executive accountability.
6. đź” The Road Ahead
- Bandra Police Investigation: Following the FIR, expect formal questioning of Jagdishan and co-accused, as well as forensic probe of trust’s cash diary.
- Legal Countermeasures: HDFC is expected to file defamation suits or seek anticipatory bail for Jagdishan, while defending itself and its leadership in court.
- Regulatory Oversight: Any involvement from RBI, SEBI, or Finance Ministry may introduce new compliance pressures.
- Investor Sentiment: The stock market will monitor legal developments—especially if allegations intensify or clarity is achieved.
âś… Conclusion
HDFC Bank is taking a robust defensive posture:
- Denying the allegations in no uncertain terms.
- Framing them as malicious and deflective from a genuine ₹65 crore loan default.
- Preparing legal action to defend its CEO and its own reputation.
This evolving saga isn’t just about HDFC or Jagdishan—it reflects a broader tension between banking recovery practices and powerful defaulters seeking influence through legal battles.
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