In yet another development in the ongoing dispute involving the Lilavati Kirtilal Mehta Medical Trust (LKMM Trust) and HDFC Bank CEO Shashidhar Jagdishan, LKMM has flagged regulatory breach in ‘covert’ appointment of Jagdishan as the financial advisor to the Trust. On Thursday, the Trust furnished a concealed appointment letter dated February 2, 2022, that revealed that Jagdishan was made financial advisor to the Trust without the knowledge, consent, or ratification of its Permanent Trustees Kishor Mehta and Charu Kishor Mehta.
“As far as the trust knows, neither the board of HDFC, SEBI, RBI Governor or finance Ministry were in knowledge of this clandestine appointment,” the statement from the Trust maintained.
The Trust alleged that the ‘covert’ appointment was orchestrated by Chetan Mehta in collaboration with Rekha Seth and others described as ‘purported trustees’, in what appeared to be a deliberate and unlawful strategy to grant external access and control over the Trust’s financial decisions and keep the ‘illegal board’ in power.
“The appointment was never disclosed in any formal board proceedings, nor presented for approval to the founder trustees,” it alleged.
In the statement released by Lilavati Trust, it said, the revelation is a “critical evidence of an ongoing conspiracy, designed and executed by Chetan Mehta to enable financial mismanagement, influence internal decision-making, and divert public charitable funds for private gain whilst keeping him and the illegal board in power.”
The Trust also raised questions on the integrity of the active managing director and CEO of a major private sector bank. “This appointment was neither transparent nor compliant with standards of fiduciary integrity expected in the banking sector,” it said.
Allegations of mismanagement and criminal activity
The note comes in line with the series of accusations leveled by the Trust against Chetan Mehta, his associates and HDFC Bank’s Shashidhar Jagdishan. The Trust has cited multiple financial irregularities and alleged criminal activities, including:
– Provision of free medical treatment to family members without board sanction.
– An unauthorised deposit of Rs 48 crore, which is under scrutiny.
– A Rs 2.05 crore bribe currently under criminal investigation.
– Corporate Social Responsibility (CSR) disbursements made without trustee consent or court approval.
HDFC Bank has denied allegations
Earlier in June, HDFC Bank had released a statement in a regulatory filing wherein it had categorically denied what it termed as “false, malicious and defamatory” allegations and insinuations made by the trustees of LKMMT.
The banking major had said that the the timing and manner of allegations against the bank’s Managing Director and CEO demonstrate the devious objective of preventing the Bank from carrying out its legal mandate of recovery and enforcement.
For now, the private sector major has not issued any statement on LKMMT’s allegations of ‘covert’ appointment of Jagdishan as the financial advisor of the Trust.