HDFC Bank: After Atanu Chakraborty’s shock exit, Sebi chief sends strong message to independent directors

Days after the unexpected resignation of HDFC Bank’s non-executive chairman Atanu Chakraborty, Securities and Exchange Board of India (Sebi) Chairman Tuhin Kanta Pandey has emphasised that independent directors must act responsibly and avoid making unsubstantiated claims.

Chakraborty stepped down citing concerns related to ethics and values.

Independent Directors Must Safeguard Minority Shareholders

Pandey reiterated that independent directors play a crucial role in protecting the interests of minority shareholders. He stressed that individuals in such positions are expected to exercise diligence and responsibility in their conduct.


“Independent directors are expected to act responsibly,” Pandey said, underlining the importance of their fiduciary duties.

Warning Against Unverified Allegations

Addressing the nature of Chakraborty’s exit, Pandey cautioned against making insinuations without adequate evidence.

“No one is expected to make insinuations without proper evidence and records,” he said during a post-board meeting interaction with reporters.

He further added that vague statements can create unnecessary uncertainty in the market.

Established Mechanisms Exist for Raising Concerns

Pandey pointed out that there are formal systems in place for independent directors to raise concerns. These include reporting issues to the board and ensuring they are properly documented in official records.

“Concerns should be addressed through the proper channels and duly minuted,” he said, adding, “We cannot keep things vague.”

Market Reaction and Regulatory Scrutiny

Chakraborty’s resignation triggered a sharp correction in HDFC Bank’s stock, reflecting investor concerns over governance issues at the country’s largest private sector lender.

In response, Sebi has initiated a review of the matter. Pandey confirmed that the regulator will examine all aspects to establish the facts and ensure transparency.

Sebi to Probe Governance Concerns

The market regulator is expected to conduct a detailed investigation into the circumstances surrounding the resignation. Pandey emphasised that independent directors hold positions of significant responsibility and accountability within corporate governance frameworks.

Inputs from agencies