Chapter 14B: Just about three months ago a simple post on my account pointed the need to break up HDFC. And blamed the Chairman for faulty oversight. To absolve himself, the Chairman resigned. But hasn’t returned a penny of the remuneration he received for being employed as a gig worker endorsing everything HdFC did. There is a RBI nominee in the Board. Who seems to have no view on anything.
HDFC is a fit case for regulatory action similar to Dewan Housing, Yes Bank, Satyam Computers, Srei or Reliance Capital. In fact it is far more urgent than Yes Bank. Any delay could affect safety of casa and FD holders. The emerging geopolitics of the world will lead to bursting of the real estate bubble, disappearance of credit card interest collection at 60% pa and end of the money export business (US University fees are collapsing and Dubai real estate is dead). Consumers are refusing to move FD money into ULIPs, mutual funds and other exotic instruments. HDFC has zero interest in lending for national progress.
The HDFC share price is maintained because of the absence of adequate retail holding. Thus free market forces don’t act. Otherwise a bank of such dominance cannnot quote at 2.5 times of book value. Going forward they have to either stop growing or have to take over one of the three main banks- SBI, PNB or BoB.
Leadership change at HdFC is not just desirable. It is imperative.
The former Chairman can’t just walk away by the pot calling the kettle black. He has to be made accountable for his sins of omission. His remuneration has to be clawed back.
A paid independent role is not a time pass one for retired Bureaucrats. It carries huge responsibility. And accountability. His resignation and the reasons given for the same are an admission of guilt.
Who exactly approved the HDFC Bank merger with HDFC Ltd. Who approved it ? What was the role of the judiciary ?
Who determined the swap ration for HDFC Ltd shares for HDFC Bank shares ? Who exactly issued the valuation certificate ? Both were listed companies. How was SAST compliance done ? What is the role of Mutual Fund money and ULIP money in influencing share prices of both entities before determination of the swap ratio.
Should the Citibank Custodian license be cancelled. There is no other custodian license owned by a bank which no longer has operations in India. Similarly the Citicorp NBFC license need termination. As does the category 1 merchant banking license.
You cannot transfer a NBFC license by slump sale of business. As was done in 2013. Where is the RBI approval. Or even application.
And why and how does Citibank have such a hold on Indian judiciary that they have never lost a case in India.
The Shivraj Puri scam at Citibank still has unanswered questions. And how did Shivraj Puri die at such a young age ?