Cobrapost, a news website, has accused Cholamandalam Investment & Finance Company Ltd. and Murugappa Group entities of being part of a financial web moving over Rs 10,000 crore in funds over nearly a decade. The investigation highlighted concerns about regulatory and governance issues arising from these transactions. Allegedly, Cholamandalam Investment & Finance Company Ltd. made cash deposits exceeding Rs. 25,000 crore in 14 banks over the last six years, with some funds further routed through additional transactions.
Cobrapost’s scrutiny, based on statutory filings and public disclosures, revealed significant cash transactions, related party arrangements, and compliance gaps involving Cholamandalam Investment & Finance Company Ltd. The investigation pointed out large-value cash movements and questionable disclosures within one of India’s major non-banking financial companies. The analysis identified key entities like Cholamandalam MS General Insurance Co. Ltd., Chola Business Services Ltd., and Murugappa Management Services as principal recipients of diverted funds.
Furthermore, Cobrapost’s findings implicated credit rating agencies, auditing firms, and non-profit organizations, including Isha Foundation, as recipients of funds from Cholamandalam Investment & Finance Company Ltd. and other Murugappa Group companies. These entities reportedly received around Rs. 120 crore during the period under review. In response, the Murugappa Group dismissed the allegations as unfounded and driven by hidden motives, emphasizing the robust performance, asset quality, and liquidity position of Cholamandalam Investment & Finance Company Ltd.
Cholamandalam Investment & Finance Company Ltd. refuted the claims, assuring investors of its strong performance, asset quality, and liquidity position as reflected in its financial statements. The company highlighted its focus on serving small road transport operators and self-employed individuals across numerous branches in India. It emphasized compliance with internal and external scrutiny processes, including KYC and income tax requirements for collections. All related party transactions are reportedly fully disclosed in compliance with legal and accounting standards.
