On May 4, Enforcement Directorate (ED) said as a part of its investigation on money laundering; they froze assets worth Rs 143 crore of Manappuram Finance Limited’s Managing Director, VP Nandakumar, in Thrissur, Kerala.
The agency said, “Hence, ED has frozen the assets of VP Nandakumar under the Prevention of Money Laundering Act (PMLA), totalling Rs 143 crore”. The ED froze eight bank accounts, investments in publicly listed shares, and shares of Manappuram Finance Limited. In addition, during the search, the agency seized incriminating documents, evidence of money laundering, and documents of 60 immovable properties.
The ED conducted raids at six premises belonging to the company and VP Nandakumar in Thrissur on May 3.
According to a statement from the agency, the case involves allegations of money laundering and large-scale cash transactions through public deposits without RBI’s approval by Nandakumar’s proprietary firm, Manappuram Agro Farms (MAGRO). Through his employees, Nandakumar unlawfully collected the deposits at several branch offices of Manappuram Finance Limited (MFL), a publicly listed company.
The ED alleged that “the outstanding illegally collected deposits, which are the proceeds of crime, have been detected to be Rs 143 crore. When RBI detected the same and directed to return the amount to the depositors, the accused have responded to RBI that they have returned the money to the depositors, but ED investigation revealed that there is no proof of repayment or no KYC of the depositors”.
The financial investigation agency reported that the deposits worth Rs 53 crore were supposedly returned in cash without proof of repayment or KYC.
The ED said that during the investigations, “During the course of the searches, it was found that the proceeds of the crime were diverted and invested by VP Nandakumar into immovable properties in the names of himself, his spouse and children and into the shares of Manappuram Finance Ltd. Hence, his assets, totalling to Rs 143 crore, were frozen under the Prevention of Money Laundering Act (PMLA)”.
The agency is also probing the role of Manappuram Finance Limited’s chief financial officer and other employees in money laundering.
On May 5, Nandakumar wrote a letter to the Board of Directors of his company, which was shared with the stock exchanges, “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”.
Manappuram Finance Ltd is a non-banking financial institution (NBFI) that provides various services and products, including online gold loans, micro-home financing, foreign exchange and money transfers, business loans, and secured personal loans.
