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Informist, Tuesday, Dec. 23, 2025

MUMBAI/NEW DELHI – Cholamandalam Investment and Finance Co. Ltd. called the allegations of corporate misgoverance against the company as malicious and baseless "with ulterior motives". 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.

Cholamandalam Investment said it has complied with all regulations on reporting such related-party transactions and business practices in its financial statements. It also categorically rejected that certain individuals, including promoters alleged by Cobrapost, were benefitting from such practices.

After the release of the statement, the company's shares jumped 6.4% to INR 1,687.40 on the National Stock Exchange at 1008 IST. The stock had fallen nearly 4% Monday. At 1330 IST, shares of the company rose nearly 7% from the previous close to INR 1,693.90.

In clarification to the allegations of large cash deposits by the company, it said these large cash deposits have resulted from lending to small road transport operators and self-employed non-professionals who earn wages in cash and thus pay their equated monthly instalment in cash. The company clarified that all cash deposits are subject to internal and external scrutiny and such collections are done in compliance with the legal requirements.

The related-party transactions had arisen due to Cholamandalam Investment's payment to fellow subsidiary companies such as Cholamandalam MS General Insurance Co. Ltd. for the borrower's health insurance cover benefits. Other related-party transactions include payments made to Murugappa Management Services and others for labour, strategic services, information technology, and for meeting temporary working capital needs.

All such transactions are in compliance with legal and accounting requirements and are disclosed in Cholamandalam Investment's financial statements, the company said. According to Cobrapost, Cholamandalam Investment has diverted sums worth around INR 64.19 billion to related parties since 2015.

The company rejected any allegations against the transactions benefitting its board members and other individuals as all such transactions were made in compliance with the applicable law and had been disclosed to shareholders.

Cholamandalam accepted that it had made payments to the rating agencies for higher rating and referred to it as "standard industry practice". "In some years, where the borrowing figures are higher or the Company has done more borrowing, there would be more ratings and higher rating costs paid to such agencies," the company said.

Any payments made to non-government organisations and implementation agencies in the form of work contracts are under the mandatory payments required for corporate social responsibility under the law.

Cholamandalam said all its operations are carried out as per the laws of the land following due compliance of applicable regulatory guidelines and alleged that Cobrapost selectively presented distorted facts for its benefit.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Aaryan Khanna and Janwee Prajapati

Edited by Tanima Banerjee

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