M&M Finance defers its Q4 results after unearthing Rs 150-crore fraud
loan fraud at one of its branches in the Northeast, sending shares of the non-bank lender nearly 8% lower.
According to the company, the fraud involved the forgery of KYC (know your customer) documents to embezzle company funds.
«Investigations in the matter are at an advanced stage. The company estimates that the financial impact of this fraud is unlikely to exceed ₹150 crore… necessary corrective actions have been identified and are at various stages of implementation, including the arrest of few persons involved,» the company said in a post-midnight regulatory filing.
Shares of M&M Fin fell as much as 7.9% in early trade on BSE but later recovered to close nearly 5.5% lower at ₹263.60 apiece.
M&M Fin said due to the discovery of the fraud, agenda matters concerning approval of financial results for the fourth quarter as well as for the financial year ended March 31, recommendation of dividend, AGM and related matters, which were to be considered at a board meeting on Tuesday are being deferred to a later date which shall be intimated in due course.
However, the company's audit committee and a board meeting to consider other matters like an increase in aggregate borrowing limits and fundraising through the issue of non-convertible debentures will take place as per schedule. The company did not specify the branch where the fraud took place.
Macquarie analyst Suresh Ganapathy said the latest development underscores his scepticism on M&M Fin. «MMFS was portrayed as a turnaround story...(but) the reality is
