The Enforcement Directorate has frozen the assets of V.P. Nandakumar, managing director of Manappuram Finance Limited (MFL), worth ₹143 crore.
The frozen assets included eight bank accounts, investments in listed shares, and shares of MFL. Incriminating documents on money laundering by the firm and documents of 60 immovable properties were seized during the search on six premises of the company in Thrissur. The ED had searched the premises belonging to the firm and Mr. Nandakumar on Wednesday as part of the investigation under the Prevention of Money Laundering Act, 2002, said a communication.
The searchers were carried out following allegations of money laundering from illegal collection of deposits by the firm from the public.
The searchers revealed that the proceeds were diverted and invested by Mr. Nandakumar in immovable properties in his name and those of his spouse and children and in MFL’s shares. Evidence of money laundering and large-scale cash transactions in the form of public deposits carried out by Mr. Nandakumar through his proprietary firm, Manappuram Agro Farms, without the approval of the Reserve Bank of India (RBI) was also unearthed. The deposits were illegally collected by him at various branch offices of MFL through some of its employees, the ED communication said.
Though the RBI, which detected illegal collection of funds, had directed the company to return the money to depositors, the firm had informed the agency that that it had returned the money. However, the ED investigation revealed that there was no proof of repayment or no Know Your Customer (KYC) documents of depositors in the firm. Though an amount of ₹53 crore, which was collected as deposits, was shown to have been returned in cash, there was no proof of repayment or KYC, the agency noted.
The role of the chief financial officer and other employees, who are suspected to have played a part in money laundering, was also being investigated, the communication said.
