The IndusInd Bank Scandal: A Timeline of Events
Whistleblowers at banks are not new. Bank chiefs have either lost their jobs, faced considerable professional censure or even legal proceedings owing to disclosures made by those who choose to break ranks and lodge complaints against misdeeds.
The story at IndusInd Bank is no different. According to two people with direct knowledge of the matter, the bank’s former Chief Financial Officer Gobind Jain has now submitted evidence of serious wrongdoings of the lender over many years.
The Resignations: A Series of Events
The two people quoted above include a person directly involved with the investigation and a second person with direct knowledge of the investigation. NDTV Profit has also reviewed a part of these documents.
These include mail trails, accounting documents and personal correspondence between Jain and IndusInd Bank’s previous management team over months.
According to the first person quoted above, who is directly involved with the investigation, the former CFO has pointed fingers at senior board functionaries and members of the management as being complicit in hiding information from regulators and other stakeholders.
Allegations of Wrongdoing
In his submissions Jain has alleged that the bank’s senior management team has been carrying forward serious accounting gaps for years, with the board of directors also in the know. He has also alleged that he was made to rewrite his resignation, which he had submitted four times over 2024, to hide crucial evidence of improper accounting.
On Jan. 18, IndusInd Bank informed exchanges about the resignation letter by its then Chief Financial Officer Gobind Jain, which was received by the bank a day prior. The exchange notification stated that Jain would step down from his role on Jan. 20, though he would serve his 90 day notice period.
Investigations and Aftermath
In about two months though, on March 10, the world came crashing down on the bank. Then MD & CEO Sumant Kathpalia and Deputy CEO Arun Khurana held a conference call with analysts, to explain a recent disclosure by the lender where “discrepancies” in the derivatives accounting portfolio were detected.
During the call, analysts did point to the fact that the CFO had quit only two months ago. When asked if the two events had anything to do with each other, Kathpalia said they were not linked.
“He was aware of this transaction, and if you see the resignation, it is in public domain. I don’t think it is linked to only this transaction. He had a different reason on why he was leaving and we were fine with it,” the then MD & CEO had said on the conference call.
Implications for Investors
The implications of this scandal are far-reaching, and investors need to be aware of the potential risks and consequences. With the bank’s reputation at stake, it’s essential to stay informed and up-to-date on the latest developments.
For more information on the IndusInd Bank scandal and its impact on the Indian banking sector, read our in-depth analysis.
Conclusion
The IndusInd Bank scandal is a stark reminder of the importance of corporate governance and transparency in the banking sector. As investors, it’s crucial to stay vigilant and informed about the companies we invest in, and to demand accountability from those in power.
