A high-stakes feud has erupted between Mumbai’s Lilavati Kirtilal Mehta Medical Trust and HDFC Bank, with the Trust accusing the bank’s MD and CEO, Sashidhar Jagdishan, of involvement in a ₹14.42 crore embezzlement from its funds. In a June 7, 2025 statement, the Trust – which runs the prominent Lilavati Hospital – demanded Jagdishan’s immediate suspension from all executive roles, claiming he had “abused his institutional position” and been “directly involved” in “serious financial fraud” . The Trust says the allegations stem from an FIR ordered by a Mumbai magistrate in late May 2025, based on seized documents revealing ₹14.42 crore misappropriated by its officials – with ₹2.05 crore allegedly paid to Jagdishan to “harass the father of a current trustee” . HDFC Bank has flatly denied the claims as “malicious” and “preposterous,” calling them a baseless attempt to derail its long-running loan-recovery case with the Trust’s founding family . The clash has serious implications for corporate governance and regulatory oversight in India’s banking sector, and has drawn scrutiny from investors and officials alike. (Livemint.com)
Timeline of Key Events
- June 7, 2025: Trust Issues Statement. The Lilavati Trust publicly accused Jagdishan of personal involvement in the misappropriation and called on the HDFC Bank board, RBI, SEBI and Finance Ministry to suspend him immediately . It demanded Jagdishan’s prosecution for “fraud, criminal conspiracy, [and] abuse of fiduciary position” .
- June 8, 2025: Bank’s Official Rebuttal. HDFC Bank issued a filing denying the allegations and linking them to the longstanding loan dispute. The filing noted that Splendour Gems’ dues (owed by the Mehta family) stood at about ₹65.22 crore as of May 31, 2025, and vowed to “continue all lawful remedies to recover the dues” . The bank labeled the charges “malicious and baseless,” saying they were made “in response to ongoing recovery proceedings” with “malafide intention” to evade payment .
- June 9, 2025: Public Scrutiny. News outlets reported that the Trust had formally filed the FIR under FIR No. 818/2025, and highlighted Jagdishan’s denial. Media quoted the FIR’s claim that Jagdishan received ₹2.05 crore from the trust funds “to harass the father of a current trustee,” and the bank’s insistence that Jagdishan is being “targeted by unscrupulous persons” to stall loan recovery .
Lilavati Trust and HDFC CEO: Background
The Lilavati Kirtilal Mehta Medical Trust (LKMM Trust) is a charitable trust that runs Mumbai’s Lilavati Hospital. Founded by industrialist Kishore Mehta (later joined by his brother Vijay Mehta’s family), the trust has been beset by family feuds for decades. In 2023, after a prolonged court battle, the faction of Kishore Mehta gained control of the trust over Vijay Mehta’s heirs . According to reports, the new trustees uncovered alleged financial malfeasance by the previous board, though those trustees deny wrongdoing.
HDFC Bank is India’s largest private-sector lender, and Sashidhar Jagdishan (often called Sashi Jagdishan) has been its Managing Director and Chief Executive since 2020. An award-winning banker and chartered accountant, Jagdishan joined HDFC Bank in 1996, became CFO in 2008 and rose to CEO in late 2020 . He is widely respected for his conservative management style and integrity. Prior to these allegations, neither Jagdishan nor HDFC Bank had any public involvement with the Lilavati Trust or its internal disputes beyond the bank’s status as a creditor of Splendour Gems (the Mehta-owned borrower) .
Allegations by the Lilavati Trust
In its June 7 media release, the LKMM Trust laid out a dramatic narrative of wrongdoing. It said the Bombay court-ordered FIR (No. 818/2025) was prompted by evidence from seized cash diaries. According to the Trust, these records showed ₹14.42 crore misappropriated by trust officials, and that ₹2.05 crore of that amount “was received by Jagdishan, establishing his direct involvement” . Crucially, the Trust alleges the money paid to Jagdishan was intended “to harass the father of one of the current trustees” – suggesting the payments were part of an attempt to influence or intimidate trust insiders .(economictimes.indiatimes.com)
HDFC Bank’s Response
HDFC Bank immediately pushed back. In an official exchange filing on June 8, the bank described the claims as a “gross misuse of the legal process” . A spokesperson said the allegations against Jagdishan were “outrageous and preposterous” and were being used by “unscrupulous” parties to delay repayment of long-outstanding loans . The bank noted that Splendour Gems’ total dues, which include interest, stand at about ₹65.22 crore (as of May 31, 2025) . It added that HDFC Bank “unequivocally rejects and strongly condemns” the “malicious and baseless allegations” and is committed to defending its CEO’s reputation.A bank statement emphasised its confidence in Jagdishan, saying “The bank takes immense pride in the integrity and leadership of its MD & CEO” .
HDFC also pointed out that the Mehta family has previously launched multiple legal actions – civil suits, minority-shareholder petitions and even criminal complaints – against the bank in this matter, all of which were either dismissed or still being contested in court . The bank maintains that these new allegations are retaliatory, aimed at “obstruct[ing] and undermining legitimate recovery proceedings” on the Splendour Gems loan . Notably, the stock market did not panic: HDFC Bank’s share price held steady around ₹1,980 in early trading on June 10, essentially flat on the news .
Past Controversies and Implications
The Lilavati Trust’s allegations come amid a long history of conflict around the hospital. As noted, even in the early 2000s one family faction accused another of forging signatures to grab control of the trust . The current dispute essentially pits the indebted former owners (now running the hospital) against their former creditor (HDFC Bank). In effect, the fraud accusation may be entangled with the ₹65-crore debt collection. For HDFC Bank, the immediate financial risk seems limited (65 crores is small relative to its balance sheet), but the reputational risk is high. If regulators viewed the CEO as compromised, it could trigger a boardroom crisis or shake investor confidence in governance standards. Jagdishan’s
personal standing is on the line: as the Trust noted, continuing to run the bank while facing a criminal probe could violate RBI rules for “fit and proper” executives .
On the other side, if HDFC Bank succeeds in proving the payments to Jagdishan were fabricated or unrelated, the family members backing the Trust might face legal backlash. The bank has openly branded this a “malafide personal attack” . Several news reports suggest the underlying loan battle even reached the Supreme Court in 2024, where judges criticised the Mehtas’ tactics as stalling repayment . Now, the stakes have escalated: a major banking leader is caught up in a headline-making accusation of fund diversion.
Key reader precautions to keep in mind while interpreting this news to ensure balanced and responsible understanding.
- Highlight that these claims are unverified: the FIR only initiates an investigation and no guilt has been established. As one journalism guide reminds us, “these are allegations, not proven facts” , so summaries of the case should avoid presenting the accusations as settled truth.
- Emphasise the presumption of innocence: legally, a suspect is considered innocent until proven guilty . Reporting should be careful not to imply the CEO’s culpability before a court decision, in order to respect due process.
- Consider possible underlying motives: HDFC Bank has labeled the allegations “baseless” and part of “a deliberate attempt to derail ongoing loan recovery efforts”. Readers should be aware of any corporate or debt-recovery disputes that might be influencing these public accusations, and keep such context in mind.:
Sources: Contemporary news reports and official filings from June 2025, including Mint (Jocelyn Fernandes)( livemint.com), Indian express (Indianexpress.com), Economic Times (economictimes.indiatimes.com, NDTV , and others, have been used to detail the allegations, responses and background. Each source is cited in the text above.
