Manappuram MD Alleges ED Visit Was A Result Of A Malicious FIR

The Managing Director of Manappuram Finance Limited, Mr. VP Nandakumar, stated that the visit of officials from the Enforcement Directorate (ED) was in connection with a "malicious FIR" registered against the company.

Nandkumar claimed, "The ED Visit has nothing to do with the affairs of the Company but pertains to a 10 year old matter of my erstwhile proprietorship Manappuram Agro Farms ("Magro"), which is no longer in existence. The freezing order itself clarifies that the ED's search operation was directed at Agrofarm."

"The shares that have been frozen by the ED are worth approximately Rs 2,000 crore, but the value attributed to them is around Rs 140 crore. I am reviewing my legal options in this matter," said Nandakumar in the letter to the company's Board, shared with stock exchanges on Friday.

He also stated that, the total amount of pending deposits to which the matter pertains is less than Rs 10 lakh, which is lying in escrow account.

Nandakumar said on Friday that "the alleged matter of the deposits has already been examined in detail by all the concerned regulators".

"I was the sole proprietor of a concern called Manappuram Agro Farms ("Magro") until 2015-16, which was primarily engaged in the non-financial services business of agriculture (including eco-farming) in Thrissur. Magro used to accept deposits from people residing at Valapad and its neighbouring areas where my family has done business for over 60 years. It would pay interest on these deposits and use the funds raised in its primary business of agriculture".

"The total quantum of deposits outstanding as on 1st Feb 2012 was Rs 143.85 crore, which was fully and duly accounted for in Magro's books. Since the principal business of Magro was agriculture, it accepted deposits in the bona fide belief that this was permissible under law. However, based on communications from the RBI in 2012, Magro stopped accepting, renewing and soliciting deposits. d. Eventually, Magro decided to repay all its deposits... All subsequent repayments to the depositors were to be made out of the escrow account through banking channels. Monthly report of progress of repayment of deposits were collected by RBI and their latest inspection report mentions that as of September 30, 2022 only Rs 9.29 lakh was outstanding to be repaid which was kept in an escrow pending receipt of claims by the relevant depositors," said Nandakumar in his letter.

In his letter, Nandakumar claimed, "The FIR is a malicious abuse of process by an individual who has a long-standing grouse against my family and me. I am certain that its frivolity will eventually be established before the courts. Meanwhile, I am fully cooperating with the Enforcement Directorate as I am very clear that there is no illegality of any kind at all. The alleged matter of the deposits has already been examined in detail by all the concerned regulators and there has been no adverse order passed against me or Magro."