The legal action centers on accusations that HDFC leadership, including CEO Sashidhar Jagdishan and CFO Srinivasan Vaidyanathan, violated federal securities laws by masking interest payments to the Maharashtra State Road Development Corporation. According to the complaint, the bank funneled approximately Rs 45 crore—roughly $4.7 million—to the state firm to incentivize large deposits, effectively bypassing Reserve Bank of India regulations on interest rate caps.

These payments were allegedly mischaracterized as sponsorship funds for road safety campaigns, a practice the lawsuit claims led to the overstatement of HDFC’s financial health. The scheme began to unravel in March 2026, when Independent Director Atanu Chakraborty resigned, citing practices that conflicted with his personal ethics, triggering a 7.28% drop in American Depositary Shares. Further scrutiny arrived in May 2026 following an investigative report that linked top management to an internal vigilance probe, causing shares to slide an additional 4.1% to $23.78.

Hagens Berman partner Reed Kathrein is spearheading the investigation into whether the bank’s public disclosures regarding governance and compliance were fundamentally false. Affected shareholders seeking to participate in the litigation are encouraged to contact the firm before the court-imposed cutoff on October 13, 2026.