2 top Bharat Financial execs can't be relieved till review ends: IndusInd

IndusInd arm says cannot let its two execs join Spandana when the review is ongoing

Shalabh Saxena and Ashish Damani, appointed chief executive officer (CEO) and chief financial officer (CFO) of Spandana Sphoorty Financial (SSFL), cannot be relieved from their services at Bharat Financial Inclusion (BFIL) until a review of certain transactions at the present company is completed, IndusInd Bank clarified to the exchanges on Tuesday.

BFIL is a wholly owned subsidiary of private sector lender IndusInd Bank.

“...certain transactions relating to BFIL are a subject matter of an ongoing review and the continued employment of Saxena and Damani at BFIL is critical to the closure of such a process,” said the bank.

Clarifying allegations of ever-greening at its subsidiary, the bank had said earlier this month that BFIL had disbursed nearly 84,000 loans without customer consent in May due to a technical bug. The bank said an independent review has been initiated to see if there was any process lapse or accounting failure at BFIL.

According to the terms of their employment agreement with BFIL, Saxena and Damani are prohibited from accepting employment at a competitor such as SSFL, unless approved in writing by the board of BFIL. 

“…as resignation from BFIL has not been tendered to the board by Saxena and/or Damani, any purported acceptance by them of employment at SSFL would be in contravention of the terms of their employment with BFIL,” said the bank. 

SSFL said: “The Spandana Board is in continued discussions with all key stakeholders and will update when we have anything additional to report.” 

On Tuesday, the bank informed the exch­anges that both Saxena and Damani have not yet resigned from their positions at BFIL. Once they tender their resignation, it will be subject to the acceptance of the board of directors of BFIL.  Erstwhile CEO of SSFL, Padmaja Reddy, did not respond to calls and messages.