M&M Finance has postponed its scheduled board meeting, originally planned for April 23, to discuss its fourth-quarter results. This came after the non-bank lender, informed the exchanges late on Monday that a fraud to the extent of Rs 150 crore was detected at one of the company’s branches in the North East region.
The fraud involved forgery of KYC documents related to retail vehicle loans, resulting in the misappropriation of company funds.
According to M&M Finance’s notification to the stock exchange, the fraudulent activity has led to the misappropriation of company funds. The estimated financial impact of this deception is anticipated to be within Rs 150 crore, as stated in the exchange filing. In response to the situation, the company has promptly initiated necessary corrective measures.
The company has identified necessary corrective actions and has informed exchanges that a few persons involved have been arrested.
The Audit Committee and Board Meeting on the same date will address other agenda items, including discussions on raising aggregate borrowing limits and issuing Non-convertible debentures. Additionally, the annual earnings conference call has been deferred.
The matter has also been reported to the Reserve Bank of India’s central fraud monitoring cell. The company also said that investigations are already underway and are at an advanced stage. The necessary corrective action, identified by the company, is in various stages of implementation.
Shares of Mahindra & Mahindra Finance around 9:37 am were trading 4.5% lower on Tuesday at Rs 266.15. The scrip touched an intraday low of 7 per cent. Shares of the non-bank lender have had a subdued last 12 months, gaining close to 10% but underperforming most of its peers.
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