In an unexpected development, reportedly linked to loan defaults, the Lilavati Kirtilal Mehta Medical Trust (LKMM Trust)—which oversees a prominent healthcare institution in Mumbai—on Saturday called for the immediate suspension and prosecution of HDFC Bank Managing Director and CEO, Sashidhar Jagdishan, accusing him of involvement in a series of financial frauds concerning the Trust.

Responding late in the evening, an HDFC Bank spokesperson strongly denied the allegations made by the Trust, its trustees, and officials, dismissing them as “baseless and malicious”. “The Trustee, Prashant Mehta and his family members owe substantial amounts to HDFC Bank which were never repaid,” the bank spokesperson said.

“The Trust calls upon the board of HDFC Bank, the RBI, SEBI and the Finance Ministry to suspend Jagdishan from all executive and board roles with immediate effect,” the Trust said in a statement earlier in the day. “FIR No. 818/2025 was registered under orders of the Bombay Magistrate Court after a seized cash diary revealed Rs 14.42 crore misappropriated by trustees, of which Rs 2.05 crore was received by Jagdishan — establishing his direct involvement,” the Trust alleged in a statement. There are seven other accused in the said case.

According to the bank spokesperson, Jagdishan is being targeted by unscrupulous persons who are abusing the legal process to thwart the recovery of the long outstanding loan due to the bank from recalcitrant defaulters. “The outrageous and preposterous allegations are strongly and categorically denied,” he said.

Recovery and enforcement actions have been taken by the bank over two decades and at every stage Prashant Mehta and his other family members have launched numerous vexatious legal actions, bank spokesperson said.

“Having consistently failed at all levels including the Supreme Court, they have now resorted to the recent mala fide personal attacks on the Bank’s MD & CEO with the sole objective of intimidating and bullying the bank and its MD & CEO from carrying out the mandate of recovering all outstanding loans in every possible manner permissible under law,” the bank spokesperson said.

He said the bank has obtained comprehensive legal advice and representation in this regard and it is committed to pursuing legal remedies and options to defend its MD & CEO’s reputation. “The bank takes immense pride in the integrity and leadership of its MD & CEO,” the spokesperson said.

Citing violation of the RBI’s ‘Fit and Proper’ criteria, the Trust alleged that active criminal allegations of conspiracy, corruption, and breach of trust disqualify him from continuing as CEO under the RBI norms. “His continued position poses a serious risk of evidence tampering, institutional interference, and intimidation of witnesses,” it alleged.

“The offer of Rs 1.5 crore disguised as CSR funds to hospital staff shows intent to destroy evidence and obstruct justice,” the Trust alleged. Despite judicial findings and multiple complaints, HDFC Bank failed to act, violating Section 166 of the Companies Act and SEBI governance mandates, the Trust alleged.

The conflict between the old and new members of the LKMM Trust has been ongoing for years. In 2023, following a prolonged legal battle, control of the trust was awarded to the family of Kishore Mehta, prevailing over the family of Vijay Mehta.

Lilavati Hospital, established in 1997 by Kishore Mehta, gradually saw members of Vijay Mehta’s family brought onto the board of trustees over time. However, controversy arose in 2002–03 when it was alleged that Vijay Mehta’s family had forged board members’ signatures to seize control of the trust while Kishore Mehta was receiving medical treatment abroad. Both Kishore and Vijay Mehta have since passed away.

“This is not a private feud or a commercial misunderstanding. This is a deeply rooted criminal betrayal of fiduciary obligations, charity law, public money, and the rule of law. Sashidhar Jagdishan has abused his institutional position not only to suppress truth but to subvert justice. We seek his immediate removal to restore faith in India’s banking and legal systems,” alleged Prashant Kishor Mehta, Permanent Trustee of LKMM Trust.

Earlier this year, the trustees of Mumbai’s Lilavati Hospital filed complaints of fraud against seven former trustees and 10 others alleging financial irregularities to the tune of Rs 1,250 crore over the past two decades. A case under sections of the law including cheating, forgery, and criminal breach of trust was registered on March 6. This was the third FIR registered on the allegations since June last year

Source: The Indian Express.