HDFC Bank shares are under scrutiny following allegations against its Managing Director and CEO, Sashidhar Jagdishan, who has been named in a First Information Report (FIR) concerning alleged financial fraud linked to the Lilavati Kirtilal Mehta Medical Trust (LKMM Trust). The allegations and the subsequent legal actions are poised to keep HDFC Bank's stock in the spotlight for investors.
The core of the issue stems from a dispute within the Mehta family, who control the LKMM Trust, which operates Mumbai's Lilavati Hospital. The FIR, prompted by a May 30 court order, directs police to investigate claims of financial irregularities. Specifically, Jagdishan is accused of receiving ₹2.05 crore from a former LKMM Trust member to harass the father of a current trustee. The transaction, the complaint alleges, is documented in a handwritten diary submitted as evidence. The Trust has further claimed that previous trustees may have destroyed other relevant evidence. In addition to Jagdishan, seven other individuals, including former bank employees, have been accused of financial fraud and misappropriation of the trust's funds.
HDFC Bank has vehemently denied these accusations, branding them as "baseless and malicious." The bank asserts that these allegations are a retaliatory tactic by the Mehta family to derail ongoing efforts to recover substantial, long-standing dues owed by Splendour Gems, a company owned by the Mehta family, which defaulted on its loans in 2001. The bank claims that the Mehta family is abusing the legal process to thwart the recovery of a long-outstanding loan, which, including interest, amounted to approximately ₹65.22 crore as of May 31, 2025. The bank also stated that a Debt Recovery Tribunal had issued a recovery certificate in 2004 for the dues, which remain substantially unpaid.
The Lilavati Trust has called for the immediate suspension of Jagdishan from all executive and board roles, urging the HDFC Bank board, the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Finance Ministry to take action. In response, HDFC Bank has declared its intention to pursue all available legal remedies to recover public funds and address what it considers retaliatory actions by the Mehta family. The bank has also expressed full confidence in Jagdishan's integrity and leadership and is committed to defending his reputation.
The dispute within the Mehta family over the control of the LKMM Trust has been ongoing for years. In 2023, the Kishor Mehta faction gained control of the trust after a lengthy legal battle. Subsequently, a forensic audit was launched, which allegedly uncovered financial irregularities, including the diversion of ₹1,200–1,500 crore and unverified claims of black magic rituals at the hospital. Former trustees have denied these allegations.
HDFC Bank's stance is that the Mehta family has exhausted all other legal avenues without success and is now resorting to personal attacks to malign the bank's reputation and pressure it to halt recovery actions. The bank emphasizes that it has obtained comprehensive legal advice and is prepared to defend its MD & CEO's reputation vigorously.
The situation remains fluid, with both the Lilavati Trust and HDFC Bank твердо стоящие на своих позициях. Investors will be closely monitoring developments as the legal proceedings unfold and as more information becomes available. The outcome of this case could have significant implications for HDFC Bank's leadership and its stock performance.
