Manappuram Fin gets "ED"ed!

Manappuram Finance is currently the top loser on the BSE; the stock opened 7.5% lower at Rs.110.30 and went to an intraday low at Rs.102.60, not too far from its 15% LC of the day at Rs.101.40. Its 52-week low is at Rs.81.50.

The stock has fallen after the Directorate of Enforcement (ED) froze assets of Managing Director VP Nandakumar worth Rs 143 crore under the Prevention of Money Laundering Act, 2002.

ED conducted searches at six premises in Kerala's Thrissur, belonging to Manappuram Finance and VP Nandakumar. 

The assets include eight bank accounts, investment in listed shares and shares of Manappuram Finance. Incriminating documents evidencing money laundering and documents of 60 immovable properties were also seized during the investigation.

The ED has said that the searches have resulted in the detection of evidences regarding money laundering and large-scale transactions in the form of public deposits, which were done by VP Nandakumar through his proprietary firm - Manappuram Agro Farms (MAGRO), without prior approval from the Reserve Bank of India.

Deposits were illegally collected at various branch offices of Manappuram Finance through some of its employees.

ED added that outstanding illegally collected deposits are to the tune of Rs 143 crore and despite RBI asking the company to return the money to the depositors, there is no proof of repayment or any KYC of the depositors.

ED alleged that VP Nandakumar diverted and invested the amount into immovable properties named after himself, his spouse, children, as well as shares of Manappuram Finance.

Manappuram, from its side has said that MAGRO had accepted deposits prior to 2012 and were subsequently repaid though deposit of Rs 9.25 lakh could not be repaid despite continuous efforts.