The Enforcement Directorate 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 after it conducted raids as part of a money laundering investigation.
A total of six premises in Thrissur, where the company is headquartered, were covered during the searches that were launched on Wednesday.
The case pertains to allegations of money laundering through “illegal” collection of deposits from the public, the agency said in a statement.
During the course of searches, the ED said, it was found that the proceeds of crime have been “diverted and invested” by V P Nandakumar into immovable properties in his name, in the name of his spouse and children and into the shares of Manappuram Finance Ltd.
“Hence, ED has freezed the assets of V P Nandakumar under the Prevention of Money Laundering Act (PMLA), totalling Rs 143 crore,” it said.
The frozen assets include deposits kept in eight bank accounts, investment in listed shares and shares of Manappuram Finance Limited, the agency said.
Various “incriminating” documents showing money laundering and property documents of 60 immovable properties were also seized during the course of the searches, it said.
It 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.
Deposits of Rs 53 crore are shown to have been returned in cash, but with no proof of repayment or KYC, it said.
The agency said that the role of the chief finance officer (CFO) of Manappuram Finance Limited and other employees, who are suspected to have assisted in the offence of money laundering, are being investigated.
Manappuram Finance Ltd, a non-banking financial company (NBFC), offers a string of products like online gold loan, micro-home finance, forex and money transfer, business loan, secured personal loan among others.
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