New Delhi, December 23 (IANS). Cobra Post editor Anirudh Bahl said on Tuesday that we have found related party transactions worth more than Rs 10,000 crore in Cholamandalam Investment and Finance Company Limited and related companies of Murugappa Group, which is a complete case of conflict of interest.
Speaking to news agency IANS, Bahl said that during investigation we found that the auditors were charging very high fees. There is no problem with this, but there should not be a conflict of interest with auditors and rating companies. Here the companies belonging to the group are carrying out financial transactions with auditors and rating companies, which clearly shows conflict of interest.
He further said that related-party transactions are worth more than Rs 10,000 crore and we have focused only on that. The cash deposits that we have found are completely surprising and this remains a complete gray area for us.
Over nearly a decade, related-party transactions worth over Rs 10,000 crore were carried out through a network of related companies, family members and key management personnel of Cholamandalam Investment and Finance Company Limited and Murugappa Group, raising regulatory and governance concerns, Cobrapost news website alleged on Tuesday.
“Our investigation also reveals that a portion of these funds were diverted through further transactions, the nature and purpose of which deserve close regulatory scrutiny. The investigation also found that Cholamandalam Investment and Finance Company Limited has deposited more than Rs 25,000 crore in cash in 14 banks in the last six years. Eight of these are private institutions and the rest are public,” Cobrapost alleged in a statement. Sector Banks. These figures are approximate and subject to change if verified by any competent statutory authority.”
Cobrapost claimed that its investigation is based on examination of legal filings and public disclosures, which show “a worrying pattern of large cash transactions, suspicious related party arrangements, shocking legal disclosures and compliance gaps involving Cholamandalam Investment and Finance Company Limited, one of India’s largest listed non-banking financial companies”.
Cobrapost also alleged that its analysis had revealed some credit rating agencies, auditing firms, non-profit organizations like Isha Foundation, which have received funds from Cholamandalam Investment and Finance Company Limited and other Murugappa Group companies.
However, Murugappa Group, in a stock exchange filing, dismissed the allegations as baseless and termed them as the result of ill intentions.
–IANS
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