Gobind Jain, who resigned as IndusInd Bank’s Chief Financial Officer in January this year, has urged the Centre to remove Sunil Mehta, chairman of the bank’s board, alleging his involvement in covering up accounting irregularities that caused the lender’s stock to plunge the most since listing.
In a letter to the Prime Minister dated August 26, a copy reviewed by ET, Jain claimed that he uncovered serious issues in treasury operations that had persisted for more than a decade. Jain said he was the only executive to detect the lapses and had fought a “lone battle” to highlight them.
According to him, Mehta and his close aides created an “atmosphere of fear” within the bank, targeted him for exposing the problems, and shielded those responsible.
Employees who supported Jain were also being singled out, he alleged.
Meanwhile, IndusInd Bank denied all allegations made by Jain, calling them baseless and motivated. The bank said its board had promptly disclosed accounting discrepancies in derivatives, microfinance, and other revenue streams to stock exchanges in March–May 2025, appointed external agencies for independent investigations, reported suspected frauds to the banking regulator, and filed complaints with the SFIO and Mumbai EOW.
The bank urged the ministry to dismiss Jain’s complaint, arguing that the board acted diligently and transparently, while Jain is attempting to obstruct ongoing probes.
Gobind Jain did not respond to request for comment. “The Bank has made disclosures to the stock exchanges in relation to the identification of discrepancies in the accounting of its derivative portfolio, and the steps taken by the Bank in relation to the same, including the findings of the external independent agency of its investigation into the matter and the identification of any lapses and accountability,” the bank spokesperson said in a response to ET’s query.
In March, the Hinduja-promoted bank reported suspected frauds that led to a quarterly loss of about Rs 2,000 crore, with auditors flagging accounting discrepancies worth Rs 2,600 crore.
Acknowledging Losses
These included inflated income from microfinance loans, misclassified assets and liabilities, and Rs 1,960 crore of notional profits from internal derivative trades written off.
The disclosures caused the steepest plunge in the stock since listing - at 27% - the next trading session.
Jain in his letter has urged the government to suspend Mehta and initiate an independent probe, offering to hand over supporting documents to any official nominated by the authorities.
He said he has been targeted “financially and emotionally” and remains fearful but expressed faith in the prime minister’s office to ensure a fair inquiry.
Jain also alleged that statutory and forensic auditors had produced reports dictated by the board in exchange for hefty fees, while regulators such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India ( SEBI) had refrained from intervening directly.
Jain has alleged that despite auditors and consultants being engaged, findings were shaped to protect the board. He questioned why the chairman, risk committee members, and senior executives continued in office even as losses of about Rs 2,000 crore surfaced. He maintained that the resignation of the CEO and other officials months after his own exit did little to bring accountability.
Audit findings on the lender prompted an internal investigation, which revealed senior officials had overridden financial controls. Soon after, the then CEO Sumanth Kathpalia stepped down.
In a letter to the Prime Minister dated August 26, a copy reviewed by ET, Jain claimed that he uncovered serious issues in treasury operations that had persisted for more than a decade. Jain said he was the only executive to detect the lapses and had fought a “lone battle” to highlight them.
According to him, Mehta and his close aides created an “atmosphere of fear” within the bank, targeted him for exposing the problems, and shielded those responsible.
Employees who supported Jain were also being singled out, he alleged.
Meanwhile, IndusInd Bank denied all allegations made by Jain, calling them baseless and motivated. The bank said its board had promptly disclosed accounting discrepancies in derivatives, microfinance, and other revenue streams to stock exchanges in March–May 2025, appointed external agencies for independent investigations, reported suspected frauds to the banking regulator, and filed complaints with the SFIO and Mumbai EOW.
The bank urged the ministry to dismiss Jain’s complaint, arguing that the board acted diligently and transparently, while Jain is attempting to obstruct ongoing probes.
Gobind Jain did not respond to request for comment. “The Bank has made disclosures to the stock exchanges in relation to the identification of discrepancies in the accounting of its derivative portfolio, and the steps taken by the Bank in relation to the same, including the findings of the external independent agency of its investigation into the matter and the identification of any lapses and accountability,” the bank spokesperson said in a response to ET’s query.
In March, the Hinduja-promoted bank reported suspected frauds that led to a quarterly loss of about Rs 2,000 crore, with auditors flagging accounting discrepancies worth Rs 2,600 crore.
Acknowledging Losses
These included inflated income from microfinance loans, misclassified assets and liabilities, and Rs 1,960 crore of notional profits from internal derivative trades written off.
The disclosures caused the steepest plunge in the stock since listing - at 27% - the next trading session.
Jain in his letter has urged the government to suspend Mehta and initiate an independent probe, offering to hand over supporting documents to any official nominated by the authorities.
He said he has been targeted “financially and emotionally” and remains fearful but expressed faith in the prime minister’s office to ensure a fair inquiry.
Jain also alleged that statutory and forensic auditors had produced reports dictated by the board in exchange for hefty fees, while regulators such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India ( SEBI) had refrained from intervening directly.
Jain has alleged that despite auditors and consultants being engaged, findings were shaped to protect the board. He questioned why the chairman, risk committee members, and senior executives continued in office even as losses of about Rs 2,000 crore surfaced. He maintained that the resignation of the CEO and other officials months after his own exit did little to bring accountability.
Audit findings on the lender prompted an internal investigation, which revealed senior officials had overridden financial controls. Soon after, the then CEO Sumanth Kathpalia stepped down.
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