The Compliance Directorate froze the assets of VP Nandakumar, Managing Director and CEO of Manappuram Finance totaling ₹143 crore as part of an investigation under PMLA, 2002.
The frozen assets included eight bank accounts, investments in listed shares and shares in Manappuram Finance Limited. In addition, several incriminating documents evidencing money laundering and ownership documents for 60 real estate were also seized during the course of the search, said a press release issued here.
ED has conducted PMLA, 2002 searches of six premises in Thrissur belonging to Manappuram Finance Limited and its Managing Director VP Nandakumar as part of the PMLA, 2002 investigation into money laundering allegations of illegal collection of deposits from the public.
ED searches have resulted in the detection of evidence related to money laundering and large-scale cash transactions in the form of public deposits, carried out by VP Nandakumar through his proprietary firm, Manappuram Agro Farms (MAGRO) without the RBI approval. The deposits were illegally collected by him from various branches of Manappuram Finance Limited (MFL), which is a publicly traded company, through some of his employees.
The outstanding illegally collected deposits, which are the proceeds of crime, have been found to amount to ₹143 crore. When RBI detected the same and ordered to return the amount to the depositors, the defendants replied to RBI that they returned the money to the depositors, but ED’s investigation revealed that there is no proof of refund or KYC of the depositors. Furthermore, ₹53 crore of deposits are shown to have been returned in cash, but without proof of refund or KYC, the statement added.
During the course of the searches, it was discovered that the proceeds of crime had been diverted and invested by VP Nandakumar in real estate in his name, spouse and children and in shares of Manappuram Finance Ltd. Role of Manappuram Finance Limited CFO and others employees suspected of assisting in money laundering are under investigation. An additional investigation is underway, he added.