Manappuram Finance Faces Reputational Risk Amid Probe, Says S&P
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The Directorate of Enforcement (ED) is probing Manappuram Agro Farms (MAGRO), a former sole proprietorship concern of V P Nandakumar (CEO and managing director of Manappuram Finance).
The company’s stock closed 11.45 per cent lower at Rs 105.6 per share on BSE.
In a filing, the company said the ED action had nothing to do with Manappuram Finance and had no impact on its financial position/operations.
The company said the board noted with satisfaction the explanation given by Nandakumar. The matter pertained to a 10-year-old of erstwhile proprietorship concern. He updated the regulators at periodical intervals and he was in touch with his legal advisors to remedy the situation.
Ratings on Manappuram derive support chiefly from the company's strong capitalisation and earnings and from its position as one of the leaders in gold-backed lending in India.
As of May 3, Manappuram has about Rs 35 billion in working capital loans due for repayment in three months and liquid assets of about Rs 10 billion. The company has an asset base of largely shorter tenor and self-liquidating loans, tempering refinancing risk, S&P added.
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