A SEBI Research Analyst, who also happens to be a columnist at the Wire, Hemindra Hazari, wrote to the HDFC bank complaining about “inappropriate behaviour” of an Independent Director on board of the bank, Sandeep Parekh, for debunking lies on Twitter about the bank’s quest for the new MD. Parekh had rubbished ‘source’ based Reuters report on Bank’s process to determine Aditya Puri’s successor on the Twitter following which Hazari not only penned an opinion piece on the unfounded Reuters article but also sought action against Parekh for divulging details of Bank’s internal process in public.
In a scathing attack against conspiracy theorists like Hazari, Sandeep tweeted that when it comes to exposing frauds their frauds, everything is acceptable under ‘freedom of expression’, while when it comes to others, even pointing out their lie is a grave error deserving of retributory action such as getting them axed from their job.
Reuters did a story which is based on ‘sources’ which is completely false and unfounded. I sit on the board of HDFC Bank and the Search Committee for search of the new MD and should know what is happening. As a Reuters story, it was published in many Indian pink dailies.
— Sandeep Parekh (@SandeepParekh) February 4, 2020
Sandeep Parekh, who is a securities lawyer and serves as an Independent Director on HDFC board had earlier taken to Twitter to debunk misplaced assertions doing the rounds on the Internet about the bank’s search for identifying the new MD. Quoting a Reuters story reported in an Indian daily, Parekh claimed that barring the headlines which read “HDFC Bank to tap Egon Zehnder to identify Aditya Puri’s successor”, rest everything in the article was made-up by the author and factually wrong.
When this was brought to the attention of the SEBI analyst, Hemindra Hazari, he initially trivialised the issue with his tweets and later suggested Parekh and the HDFC bank to approach the courts and initiate legal proceedings against Reuters for doing a story based on unfounded sources.
Taking After this saga, Hazari posted an opinion piece about the alleged tussle in HDFC bank over the selection of the new MD. Parekh then accused Hazari of deliberately lying since he was privy to his displeasure of the Reuters piece and had interacted over the same with him on Twitter. “This is a lie-knowingly told because a kind twitter user had brought my tweet (about the Reuters piece) to his attention BEFORE he wrote his ‘opinion'”, Parekh tweeted.
This is a lie – knowingly told because a kind twitter user had brought my tweet (about the Reuters piece) to his attention BEFORE he wrote his ‘opinion’. https://t.co/XXN6O5zJXR
— Sandeep Parekh (@SandeepParekh) February 4, 2020
After this, Hazari wrote to the HDFC Bank, claiming himself to be a ‘shareholder’, asking for a list of spokespersons for the HDFC Bank and seeking clarification from the bank on whether it is appropriate for an independent director, a member of the NRC and a member of the selection committee to publicly comment on matters which he has deliberated on and which is price-sensitive information.
Hazari also asked the Bank if Sandeep Parekh’s comments on Twitter on the sensitive issue of the circumstances of selecting a successor to Aditya Puri are in contravention of condition 17 in his letter of appointment as an independent director of HDFC Bank.
“Could HDFC Bank please clarify whether Sandeep Parekh’s comments on Twitter on the sensitive issue of the circumstances of selecting a successor to Aditya Puri are in breach of condition 17 in his letter of appointment as an independent director of HDFC Bank.”
— Sandeep Parekh (@SandeepParekh) February 4, 2020
In effect, Hazari was tacitly asking the bank to initiate action against Parekh for revealing details in public domain regarding the Bank’s selection process for the new MD.
However, when HDFC Bank did not respond to Hazari’s queries, he threatened to go public on this issue stating that the bank is not responding on an issue pertaining to the inappropriate behaviour of an Independent director.
Today, I realise that what he wants to do is (sent today): “I shall be going public on this issue specifically stating that HDFC Bank is not responding to shareholder queries despite sending a communication … pertaining to the inappropriate conduct of an independent dir”
— Sandeep Parekh (@SandeepParekh) February 4, 2020
Responding to these insinuations, Parekh asserted that neither had he breached the law and contract nor had he breached his fiduciary duties. In fact, Parekh stated that he was in line with his fiduciary duties and had supported the law in catching Hazari’s lies.
I have not done anything a) in breach of law b) in breach of contract c) in breach of fiduciary duties. In fact I have supported the law in catching his lies, am not in breach of contract and was in line with my fiduciary duties.
— Sandeep Parekh (@SandeepParekh) February 4, 2020
Parekh further added that it was Hazari who knowingly committed securities fraud and created a false market he knew to be false. Parekh accused Hazari of criticising others based on established falsehoods. “When a rumour is debunked authoritatively, it can no longer be called rumour,’ Sandeep tweeted while implying that despite exposing the lies, Hazari continued to believe them and wrote an opinion piece based on it.
