IndusInd Bank shares slide as a year-old Cayman Islands order against Hinduja Bank resurfaces

• The 27 year old Hinduja Bank is one of the three major financial institutions, owned by the conglomerate, aside from IndusInd Bank and Hinduja Leyland Finance.
  
  
• The Cayman Islands order, from May 2020, said that the bank even failed to maintain the minimum net worth of 400,000 Cayman dollars and hasn’t submitted its audited financial statements since 2018.
  
  
• The Cayman Islands is popular as a tax haven for the world’s super rich and many multinational corporations.

The stock of IndusInd Bank took a beating after a report that the group had lost its banking licence in Cayman Islands for not taking steps to stop money laundering. However, the report was based on an order from May 2020. The shares of IndusInd Bank fell as much as 6%, on June 3, 2021, as investors got spooked but recovered a part of those losses soon after.

The Cayman Islands, popular as a tax haven for the world’s super rich, had stripped the Hinduja Group of its banking licence for the conglomerate’s Geneva-based bank. The Hinduja Bank is one of the three major financial institutions owned by the conglomerate ⁠— the other two being IndusInd Bank and Hinduja Leyland Finance.

In an order dated May 27, 2020, the Cayman Islands Monetary Authority, also said that the company “failed to prepare adequate” anti-money laundering policies. The director, Gilbert Pfaeffli, has been held ‘not fit and proper’ for the position.

Hinduja Bank was established in 1994 as a Swiss Banking Institution. The group website says it offers, among other services, “innovative solutions in wealth management and private banking, trade finance, corporate advisory services and global investment solutions.”

The bank has presence in Dubai, London, Paris, New York, Chennai, Mumbai, Mauritius and Cayman Islands. The Cayman Islands order said that the bank even failed to maintain the minimum net worth of 400,000 Cayman dollars and hasn’t submitted its audited financial statements since 2018. A Cayman dollar is approximately ₹88, at current prices.

The more than a century old Hinduja Group led by Chairman Srichand Hinduja ⁠— with a net worth of over $15 billion shared with his brothers, Gopichand, Prakash and Ashok Hinduja ⁠— has international interests in a variety of industries from technology to finance, from media to oil and chemicals, and from real estate to healthcare.

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