HDFC Bank falls on Auto Loan scam shares down by 3%
Mumbai based HDFC Bank is probing a scam related to vehicle financing by head Ashok Khanna to the extent of Rs. 1.2 trillion.
HDFC Bank falls on Auto Loan scam. Shares of HDFC Bank slipped 3 per cent to Rs 1,071.2 on the BSE. However, on Monday after a Bloomberg report alleged that the bank was probing allegations of improper lending practices and conflicts of interests in its vehicle-financing operation.
“The result of the investigation isn’t public. But it followed issues thrown up by an internal audit of the bank’s vehicle-dealer lending. As well as allegations of conflicts of interest in the purchase of global positioning systems. For vehicles financed by the bank”. The report said quoting unnamed sources.
At the Centre of the enquiry is Ashok Khanna, an 18-year veteran at the bank. The vehicle financing unit he headed had outstanding loans of more than Rs 1.2 trillion ($16 Billion) as of March 31, Bloomberg reported.
A spokesman for HDFC Bank confirmed to Bloomberg that there had been an investigation probe into the vehicle-financing unit but declined to give details.
“HDFC Bank’s management had been discussing a proposal for Khanna to stay on as the unit’s head for six months until October, to ensure continuity ahead of the retirement later this year of longstanding Managing Director Aditya Puri, according to the people. After the investigation, Khanna retired at the end of March in line with his contract, they added. Therefore,HDFC Bank falls on Auto Loan scam.
On Tuesday, the stock closed at Rs 1,059.20 apiece on the BSE. It has given a 20.22% returns in 3-month.
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