ED freezes Rs 143-crore assets of Manappuram Finance MD & CEO in money laundering case

The Enforcement Directorate (ED) on Thursday said it has frozen assets worth Rs 143 crore of prominent Kerala-based NBFC Manappuram Finance Ltd's MD and CEO V P Nandakumar. The move comes just a day after the central agency raided multiple premises linked to the NBFC. A total of six premises in Thrissur, where the company is headquartered, were covered during the search operation. 

Also read: 'ED search related to Manappuram Agro Farms' deposits before 2012,' clarifies Manappuram Finance; stock up 4.6%

The ED has accused Nandakumar of indulging in money laundering through the "illegal" collection of deposits from the public. In a statement, the agency said the proceeds of crime had been "diverted and invested" by Nandakumar into immovable properties in his name, in the name of his spouse and children and into the shares of Manappuram Finance Ltd. 

Also read: Manappuram Finance issues clarification on ED searches; says extending full cooperation

"Hence, ED has frozen the assets of V P Nandakumar under the Prevention of Money Laundering Act (PMLA), totalling Rs 143 crore," it said, adding that the frozen assets include deposits kept in eight bank accounts, investment in listed shares and shares of Manappuram Finance Limited. 

According to the agency, various "incriminating" documents showing money laundering and property documents of 60 immovable properties were also seized during the search operation. The ED claimed that "evidence" regarding money laundering and large-scale cash transactions in the form of public deposits, done by V P Nandakumar through his proprietary firm Manappuram Agro Farms (MAGRO), without RBI approval, have been recovered.  

The deposits were "illegally" collected by Nandakumar at various branch offices of Manappuram Finance Limited, a listed company, through some of its employees, it said. 

"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 ED alleged. 

The agency further said that deposits of Rs 53 crore were shown to have been returned in cash but with no proof of repayment or KYC. The agency said that the role of the chief finance officer (CFO) of Manappuram Finance Limited and other employees, who were suspected to have assisted in the offence of money laundering, was being investigated.  

Earlier today, Manappuram clarified that the ED's searches were linked to the money collected by an erstwhile proprietor of the promoter's concern, prior to 2012, which was subsequently paid except for an amount of Rs 9.25 lakhs.

"This is mainly with reference to the deposits accepted by Manappuram Agro Farms (MAGRO), an erstwhile sole proprietor of the concern of the promoter, prior to 2012, which were subsequently repaid except of the deposit of Rs 9.25 lakhs which could not be repaid by them despite MAGRO’s continuous efforts," the company said in a filing.