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Informist, Tuesday, Dec. 23, 2025

 

--Chola Invest: Have the right to take action against allegations on co 

--CONTEXT: Comments by Cholamandalam Invest and Fin mgmt in an analyst call 

--Chola Invest: Disbursements, especially vehicle finance, picked up Oct-Dec 

 

MUMBAI – Cholamandalam Investment and Finance Co. Ltd. Tuesday said it was evaluating legal action against the agency that published blogs and posts alleging financial and governance irregularities at the company and other Murugappa Group entities. Cholamandalam Investment said the claims against the company were "malicious, baseless and motivated".

 

Investigative news agency Cobrapost in a blog post late Monday highlighted a "worrying pattern" of large-value cash transactions and related-party transactions between the listed non-banking finance company, its subsidiaries, and the parent Murugappa Group.

 

Addressing analysts and investors on a conference call, the company's management said there appeared to be clear grounds for libel and that it would engage legal advisers to assess action against the agency for the damage to reputation. The company said it would leave it to regulators to examine whether the allegations were driven by any financial or ulterior motive.

 

The management sought to reassure stakeholders that the company's financial position remained robust, with no change in business guidance. It said the company's asset quality, liquidity and capital position continued to be strong, as reflected in its audited financials for the half year ended September.

 

As of Nov. 30, the company had cash and bank balances of INR 149.00 billion, capital adequacy ratio of 19.79%, and Tier-1 capital of 14.53%. Its net worth stood at INR 267.83 billion. The company retained its AA+ credit rating from ICRA and India Ratings.

 

Responding to questions on cash collections, the management said cash receipts were an inherent part of lending to self-employed and underserved borrowers in rural and semi-urban areas, and accounted for less than 20% of overall collections. It said all such collections are subject to statutory audits, internal controls, know-your-customer norms, and income-tax compliance.

 

On related-party transactions, the company said all transactions are fully disclosed in line with prevailing legal and accounting requirement and are undertaken in the ordinary course of business. It clarified that insurance, manpower, information technology, and management service arrangements with group entities are standard industry practice, priced at an arm's length and periodically reviewed, with no individual benefiting improperly from such transactions.

 

The management also rejected allegations around payments to rating agencies, stating that ratings are mandatory for borrowings and fees vary based on borrowing volumes. Spending towards corporate social responsibility, it said, was conducted through audited work contracts with implementing agencies, in line with statutory requirements.

 

While the management refrained from giving guidance on the performance of the current quarter, it said that disbursements, particularly in vehicle finance picked up and are expected to display healthy performance in the quarter ended December.

 

At 1311 IST, shares of the company traded nearly 7% higher at INR 1,694.90.  End

 

Reported by Kabir Sharma and J. Navya Sruthi

Edited by Akul Nishant Akhoury

 

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