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IndusInd Bank, Spandana Sphoorty spar over top management appointments

The managerial churn at Spandana Sphoorty after the public spat between the private equity firm and the promoter is turning murkier with IndusInd denying that two top executive hires by Spandana from it were false. IndusInd said the announcement regarding the hire of CEO wasn’t correct because Shalabh Saxena hasn’t yet resigned from Bharat Financial Inclusion.

As per an exchange filing by IndusInd, Shalabh Saxena and Ashish Damani are currently employed with the bank’s wholly-owned subsidiary, Bharat Financial Inclusion Limited (BFIL), as Managing Director & Chief Executive Officer and Executive Director & Chief Financial Officer, respectively.

“Neither, Mr. Shalabh Saxena nor Mr. Ashish Damani have tendered their resignation from the services of BFIL,” the statement read. “As per the terms of their employment, once the resignation is tendered, it is subject to acceptance by the Board of Directors of BFIL (Board). Upon acceptance by the Board, a specified notice period is also required to be served. However, as neither of them have tendered their resignations to BFIL, such due process has not been initiated.”

IndusInd’s rebuttal comes a day after Spandana announced that Saxena and Damani had been appointed as MD and CFO respectively.

IndusInd also said that it cannot relieve Saxena and Damani from their roles at Bharat Financial Inclusion until an ongoing review of microfinance business at the bank is completed.

“Certain transactions relating to BFIL are subject matter of an ongoing review and the continued employment of Mr. Shalabh Saxena and Mr. Ashish Damani at BFIL is critical to the closure of such process,” IndusInd said. “Accordingly, they cannot be relieved from the services of BFIL, until completion of the said review.”

IndusInd said that both Saxena and Damani are prohibited from accepting employment at a competitor of BFIL , unless approved in writing by the Board of BFIL. Any such move would be in contravention of the terms of their employment with BFIL, the statement read.

Both, the Microfinance Institutions have had their fair share of trouble. IndusInd recently faced whistleblower allegations of evergreening of loans at Bharat Financial. As per the allegations 84,000 new loan accounts were created without adequate customer consent, due to a tech glitch.

While Spandana, is engaged in a battle with founder Padmaja Reddy, who recently resigned and alleged that Kedaara Capital had forced her out.

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