Muthoot Finance on Saturday dismissed allegations of money laundering and investor fraud against its Managing Director George Alexander Muthoot as “false, baseless and misleading. The company clarified that its MD had been called by the Enforcement Directorate (ED) to provide clarifications and factual information regarding the company’s role in facilitating non-convertible debentures (NCDs) issued by Srei group companies, it said in an exchange filing.
Company issues clarification
The clarification came in response to media reports alleging investor fraud involving the company. These reports claimed that branch managers lured investors with higher returns of 8–12% on NCDs issued by Srei companies and diverted the funds. They also alleged that Muthoot Finance misrepresented “Srei Cos” as a sister concern of the group.
The company firmly rejected the claims, stating it is not engaged in any activity that violates the Prevention of Money Laundering Act (PMLA). “There has never been, nor is there currently, any commercial or business relationship between Muthoot Finance and Srei Cos or any of its directors or promoters.”
Firm rejects allegations
Muthoot further explained that Muthoot Securities was one among several Securities and Exchange Board of India (Sebi)-registered brokers that distributed the NCDs of Srei companies, including bidding on stock exchange platforms and submitting cheques and application forms with collection banks. “Any assertion or implication to the contrary is inaccurate and without basis,” it said.
The promoter family of Muthoot Finance holds an 82% stake in the company, while Muthoot Finance itself holds the remaining 18% in the broking arm.