IndusInd Bank, Spandana Sphoorty’s tussle over two high-ranking executives 

IndusInd Bank on Tuesday issued a clarification to the NSE regarding the employment of two of its high-ranking officials. The clarification came after Spandana Sphoorty Financial Limited (SSFL) announced the appointment of Shalabh Saxena as MD & CEO and Ashish Damani as Chief Financial Officer of SSFL. Both Saxena and Damani, IndusInd Bank stated, are currently employed with the lender’s wholly-owned subsidiary, Bharat Financial Inclusion Limited (BFIL), and have not put in their papers. According to the company guidelines, any employee who is currently working with BFIL cannot accept a position at a rival company, such as SSFL. This developments come amid whistleblower allegations of ever greening of loans by BFIL.

IndusInd stated in its clarification that Saxena and Damani are currently employed with BFIL in the capacity of the Managing Director and Chief Executive Officer, and Executive Director and Chief Financial Officer, respectively.

Neither Saxena, nor Damani has resigned, the lender said. Additionally, once a resignation is tendered, it will have to be accepted by BFIL’s board, following which a specified notice period will have to be served. But since neither has put in the papers, the due process has not been initiated, stated IndusInd.

Additionally, Saxena and Damani, as per their contractual terms of employment, are prohibited from accepting any role at a rival company, which also includes SSFL. Since no resignation has been submitted, Saxena and Damani’s purported acceptance of employment would be in contravention of their terms of employment with BFIL.

IndusInd stated in the clarification that certain transactions relating to BFIL are subject matter of an ongoing review. Saxena and Damani’s continued employment is critical to the said process. As such, they cannot be relieved from their duties till the review is complete, the lender said.
“In light of the above, BFIL and the Bank are in the process of evaluating and undertaking appropriate steps and actions, including strengthening the management of BFIL to continue its usual business operations under the able guidance of its management and the Bank,” IndusInd stated.

Meanwhile, in its November 22 statement, SSFL had said that Saxena and Damani accepted the positions offered by them. Saxena was named the MD & CEO of Spandana Sphoorty after the exit of founder Padmaja G Reddy earlier this month. The statement also mentioned that both Saxena and Damani are currently serving at BFIL. “Both Mr. Saxena and Mr. Damani will join Spandana soon,” it had said.

Also read: The curious case of two of IndusInd Bank's key people amid whistleblower allegations