M&M Finance detects Rs 150 cr vehicle loan fraud, postpones board meeting

Hit by a Rs 150 crore vehicle loan fraud, Mahindra & Mahindra Financial Services Ltd postponed the board’s agenda to review and approve the financial results for Q4FY24 and FY24. Its board was slated to review financial performance at a meeting on Tuesday.

In a filing with BSE, the Non-Banking Finance Company (NBFC) said a fraud was detected at one of the company’s branches in the North East in Q4FY24. The fraud involved forgery of Know Your Customer (KYC) documents related to retail vehicle loans and led to embezzlement of company funds.

The probe into the matter is at an advanced stage. The estimated impact of the fraud on the company is unlikely to exceed Rs 150 crore. The necessary corrective actions have been identified and are at various stages of implementation, including the arrest of some persons involved in the matter, the NBFC said.

The stock was down 5.47 per cent at Rs 263.6 per share at the close of trading on BSE.

The NBFC said, in view of the development, the agenda, including the approval of audited standalone and consolidated financial results and the recommendation of a dividend, which were to be considered at the meeting scheduled for today, is being deferred to a later date. The new date for the board meeting to consider results will be intimated in due course.

The matter has been reported to the Reserve Bank of India’s central fraud monitoring cell. The detection was followed by the arrest of a few persons involved in the fraud.

Its board met today to consider agenda items excluding financial performance. It approved the appointment of joint auditors—M M Nissim & Co. LLP and M P Chitale & Co—for three consecutive years from the conclusion of the ensuing 34th Annual General Meeting in 2024 up to the conclusion of the 37th AGM to be held in 2027. They will replace the existing joint statutory auditors—Deloitte Haskins & Sells, Mukund M. Chitale & Co., the company said.

The board also approved the appointment of Vijay Kumar Sharma, former LIC chairman, as an independent director for a five-year term with effect from 15 May 2024 up to 14 May 2029. The board also approved a proposal to increase the aggregate borrowing limit to Rs 1.3 trillion from the current limit of Rs 1.1 trillion.

First Published: Apr 23 2024 | 10:27 AM IST