ED Searches Manappuram Finance Premises On Money Laundering Charges, Shares Plunge 12%

The Enforcement Directorate (ED) is carrying out searches at various locations of Manappuram Finance Limited situated at Thrissur in Kerala. The premises included headquarters of the company and the residence of the promoter VP Nandakumar.

The search operation at multiple places was carried out by ED based on the allegations of money laundering activity as per a Business Today report. Illegally the firm collected deposits of more than Rs150 crore from the public without the approval of Reserve Bank of India (RBI). They are also suspected to doing large scale cash transactions without following KYC norms.

A total of 4 four premises were searched, including the promoter's residence and company headquarters as part of the investigation, as per the report.

The company said in a stock exchange filing that it was extending full cooperation to the agency. "The ED is conducting a search at our Registered Office. We are extending full cooperation to the Department, including providing complete information sought by them.

"As the search is ongoing, we will be able to provide more information on its completion. Manappuram Finance Limited has always adhered to the best practices in corporate governance and compliances," the company said.

The agency, according to sources, suspects "large-scale" cash transactions by the company and is looking at gathering documents and recording statements of the company executives in this context.

Some documents are understood to have been seized by the ED officials during the searches. The company offers a string of products portfolio like online gold loan, micro-home finance, forex and money transfer, business loan, secured personal loan among others.

The share price of Manappuram Finance Limited, has fallen by nearly 12.07 per cent to Rs 114 per piece during the day's trade after the news of ED broke out. This must have a single day massive fall the company stock. The share price is mere 2.33 per cent up in last one year while in three years it has declined by 4.28 per cent.