&imwidth=800&imheight=600&format=webp&quality=medium "IndusInd Bank's former CFO flags irregularities, demands board chairman's removal")
A former top executiveof IndusInd Bank has alleged treasury-related irregularities running into Rs 2,600 crore. The huge whistle-blower disclosure started with a letter dated August 26, addressed to the Prime Minister's Office, in which the bank's former CFO, Gobind Jain, alleged that irregularities had been underway in the bank’s treasury operations for more than a decade.
In the letter, Gobind Jain said he had been fighting a lone battle inside the bank as he tried to expose the irregularities. He said he faced resistance within the bank.
Jain alleged that some senior officials of the bank, especially board chairman Sunil Mehta and his close associates, created a “climate of fear”. He allegedthat when he raised irregularities in the running of the bank, he was targeted and the culpritswere protected.
Jain said the employees who supported him were sidelined.
IndusInd Bank, one of the largest private lenders, rejected the allegations as "baseless and motivated" and said that it had disclosed accounting irregularities in derivatives, microfinance, and other revenue streams to the stock exchanges.
It added that independent probes were carried out by external agencies, while fraud complaints were filed with the regulator, the Serious Fraud Investigation Office (SFIO), and the Mumbai unit of the Economic Offences Wing (EOW).
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The IndusInd Bank has appealed to the central government to reject Jain's complaint. It claimed that the bank's board had acted with integrity and transparency, adding that the complainant was attempting to obstruct ongoing probes.
A spokesperson said that the details of irregularities in the derivatives portfolio and subsequent actions had been disclosed to the stock exchange.
Rs 2,600 crore hit and market shock
In March, the Hinduja group-promoted bank disclosed certain suspected frauds that caused a quarterly hit of about Rs 2,000 crore. The discrepanciesincluded: Inflated income shown from microfinance loans; Misclassification of assets and liabilities; Writing off Rs 1,960 crore of fictitious profits from internal derivative trades.
After the disclosure, they registered their biggest drop in stock value since 1997 as their shares plummeted 27 per cent the next trading session.
Jain has urged the central government to remove the lender's chairman, Sunil Mehta, whom he accused of covering up accounting irregularities that duped investors of their hard-earned money.