Kerala-based non-bank lender Manappuram Finance Ltd has released a statement clarifying that the recent action taken by the Enforcement Directorate (ED) against its promoter, VP Nandakumar, is not linked to the affairs of the listed entity. The statement came after the ED froze assets worth Rs 143 crore following a search conducted at the company’s registered office on Thursday. The assets included 19,29,01,996 equity shares in the company held by Nandakumar, as well as some seized documents.
In the notification, Nandakumar stated that the probe by the ED was not related to the company but to a private entity called Manappuram Agro Farms, which is no longer in existence. He further added that the agency froze Manappuram Finance shares worth about Rs 2,000 crore that he held, but assigned them a value of about Rs 140 crore. Nandakumar also stated that he was reviewing legal options in the matter.
The ED claimed that “incriminating” documents showing money laundering and property documents of 60 immovable properties were seized during the course of the searches. The agency alleged that evidence regarding money laundering and large-scale cash transactions in the form of public deposits, done by VP Nandakumar through his proprietary firm Manappuram Agro Farms (MAGRO), without RBI approval, had been recovered. It further stated that the deposits were “illegally” collected by Nandakumar at various branch offices of Manappuram Finance Limited, a listed company, through some of its employees.
The ED alleged that the “outstanding illegally collected deposits, which are the proceeds of crime, have been detected to be Rs 143 crore.” It further claimed that when the RBI detected the same and directed Nandakumar to return the amount to the depositors, he responded to the RBI stating that he had returned the money to the depositors. However, the ED investigation revealed that there was no proof of repayment or KYC of the depositors.
Following the ED’s action, Manappuram Finance Ltd released a statement on Friday, stating that the ED’s action was against its promoter and not the company itself. The company further reiterated that it operates within the framework of all regulatory guidelines and will continue to cooperate with the ED in the investigation. Manappuram Finance Ltd also clarified that it has no connection to Manappuram Agro Farms and that the promoter’s activities in the private entity were his own.
The company’s statement also noted that it has consistently followed all regulations and guidelines set by the RBI and other regulatory authorities. It added that the company will continue to operate with complete transparency and integrity, and that it remains committed to providing the best possible services to its customers.
Manappuram Finance Ltd is a leading non-banking finance company that provides a range of financial products and services, including gold loans, microfinance, affordable housing loans, and vehicle loans. The company has a strong presence in the southern and western regions of India and has a market capitalization of over Rs 27,000 crore.
The recent ED action against Manappuram Finance Ltd’s promoter has caused concern among investors, with the company’s shares falling by over 6% on Friday. However, the company’s management has stated that the investigation is not linked to its operations and that it will continue to operate normally.
The ED’s action against Manappuram Finance Ltd’s promoter is part of a wider crackdown on illegal financial activities in India. The country’s regulatory authorities have been increasing their scrutiny of non-banking finance companies in recent years, following several high-profile cases of fraud and misconduct.
The recent crackdown on illegal financial activities in India has led to increased scrutiny of non-banking finance companies by regulatory authorities. The aim is to protect investors and ensure that non-banking finance companies operate within the framework of all regulatory guidelines.
