Is it possible that, those 143 cr are basically vp nandakumar’s own black money which he tried to launder in the name of some unknown common people deposit with MAgro? As per this theory it makes sense why ED put charges of money laundering against him and froze whole 143 cr! But still if those 143 cr belongs to vp nandakumar himself why would he need to keep 9.25 lakhs with the account? Considering the strong board of manappuram the above theory is highly unlikely but can’t take any decision at this point and holding my investment!!!
In view of the case against MD& CEO of the Company, can RBI evoke the “fit and proper criteria” and remove him from office? Inter alia, “fit and proper” requires the following to be fulfilled by any person:
i) If the director been subject to any investigation at the instance of Government department or agency
ii) If the director has at any time come to the adverse notice of a regulator such as SEBI, IRDA, MCA i.
iii) Any other explanation/information considered relevant for judging fit and proper
What’s Manappurams board has to do with VP Nandakumars personal dealing? This 143 crore deposit was taken through his Manappuram Agro, which was a sole proprietorship.
I think it makes some sense because a company Manappuram Agro which was a sole proprietorship then receiving total deposit of 150 crores itself without any advertisement or office in itself is sus. Agriculture has tax exemptions. So it’s perfect for laundering.
As per media narratives, Mr. VP Nandakumar collected these deposits for Manappuram Agro through the hundreds of Manappuram finance branches. If true, it is a clear misuse of his position as CEO and the board should have taken action.
Hi Guys,
Let me explain you the entire case and then analyst meet notes and then my take
Magro used to accept deposits from public and as on 1st of February 2012 they had outstanding deposits of 144cr. Please note Magro is a proprietorship Firm and in a proprietorship the liability is unlimited.
RBI said that they cannot accept deposit and it has to be returned. Mangro returned all the money ( As per proprietor). Now I have a question here that wouldn’t RBI do their independent review weather the money has been returned or not?
Magro used those depositors money to purchase agri land, that is the business ( ED has said that they used that depositors money to buy immovable property)
I have a question here can a SOLE proprietor use money form his firm for personal use?? I have seen small proprietor buying monthly grocery from their account.
. In March 2012 VP raised an amount of INR 159,45,62,582 through sale of shares. So the total deposit was 144cr and 10% was the interest and he transferred all this money to an an escrow account with Punjab National Bank
.
Now close to 50cr of deposits were returned through cash this is because these depositors had deposits less than 20000 hence Magro returned them via cash and this cash was withdrawn from the escrow account and paid to them. Mr Nandakumar is saying that they have the name, address, door number of all these people to whom money was returned by cash.
So they are saying that all these deposits were accepted prior to 2010 and since it was an proprietorship firm they used to comply with the INCOME TAX department and hence they dont have proper KYC detail of all of them but they have all other details as I mentioned above.
Rest all the money have been returned via cheques close to 100cr as they were above 20000 and as on date they have close to 9 lakh pending.
To enable the repayment of all deposits, permission was sought from RBI for the Company to allow Magro to maintain a small presence at the manappuram branches for 90 days from February 10, 2012 for the sole purpose of repaying the deposits
They are saying that the person who did FIR in 2012 has again done the FIR for the same matter after 10years and he has a long-standing grouse against VP family and VP.
All those Land which they purchased for the depositors money are still there but in the name of some other company.
Manappuram is in the business of lending and they said that their customers are at the bottom of the prymad so they are least interested in these cases the only thing which matters to them is money and services so the entire case is not related to manappuram and their business will not be effected. Trust factor
RBI has sought clarification form them which is routine checkup as per them and they have proactively communicated with their lenders and stakeholders. As per them Manappuram borrowing ability should not be effected.
All the returning of money was regularly shared with RBI of repayment and they have acknowledgement of depositors of money being received ( I think this is for that 100cr via cheque only)
Manappuram never had any related party transaction with Magro.
On monday they are going to approach high court and they are very confident that they will be able to put a stay order on it and their assets will be unfreezed. Please note that their Assets have been freezed and not seized.
So if this is money laundering like I am just estimating that the total depositors should be more than 25000 thousand ( 50cr/20000) so I just want to ask does this look like money laundering. Taking all your black money giving to more than 25000 people they then depositing after that you selling your shares and returning money. Looks too much. Might be wrong
My intuition is promoter is not 100% clean but the quantum mentioned here of 143cr is absolutely rubbish. My take might be wrong
If they post good Q4 numbers then anyway things will come back to normalcy. The only concern here is the money they have returned by cash which is 50cr. It is a 10yrs old case and the FIR has been done by the same person so looks like judgement should be in their favour but at the end of the day weather they win or loose on a NET NET basis they are on the loosing side.
Disclosure: I have excited 50% of my Qty with 6% loss. When ever there is a legal battle it always is a drag hance not comfortable holding entire Qty. Might be wrong
I have a question here can a SOLE proprietor use money form his firm for personal use?
Legally there is no difference between a sole proprietorship business and the proprietor, they can have the same PAN, they’ve unlimited liability. Infact there is no registration as such, and he doesn’t even need a seperate current account. He can use his personal account to do business (Needs current account if he wants GST registration). Sole propreitorship does not have a seprate legal existence like company. There is no seperate entity concept here.
So I read some news before 2012, What understood is
Both Muthoot and Manappuram opted as non-deposittaking non-banking finance companies, so they couldn’t accept deposits from the public. But these NBFCs have huge working capital requirements to give out loans, just like bank but like banks they can’t accept deposit. So what they did was they formed sole proprietorship business to collect deposits, and then there wasn’t anything expressively saying its illegal for normal firms to accept deposit. Manappurams was Manappuram agro and Muthoot Pappachans (George Muthoot’s brother company) was Muthoot Real Estate. They used the NBFC branches to take deposit. But regulators quickly cut down on them, and they had to refund the amount
Understand the whole drama of 10 year old case coming in picture after 10 years by lodging single FIR. What I donot understand is the quickness with which ED acted? It seems whosoever has filed FIR must have strong political connections.
Imo , they will get relive from Kerala High court. ED order of freeze assets is inappropriate and seems to be ill- motivated.I am fully convinced by the explanation given by management. Anyway these are times of uncertainty and despair and I brought today @ 104 rupees. Kept some cash to buy if it goes down further.
I also have some fear right now in putting my hard earned money, but this is price of holding equity and it comes in form fear & despair. Let see what happens.
Disclosure: buying from 89 rupees and views may be biased.
This is a known case and promoter vp nandkumar is dealing this since last 10 years legally .He must have dealt with lawyers 100 times in 10 years and have thought and sorted this matter 100 times
Now it’s not a new thing for any one
Court and RBI are aware of it
Clarification is very clear with no gaps
If you look at old news they correlate well
IMHO Now it’s just matter to of time before everyone will believe it
easy case creating panic in simple words- good opportunity to buy /add ,I feel
Everyone should do their homework/digging before any investing
I purchased a significant (for me) number of shares on Friday.
My reasoning-Being invested since long in the company, I knew about the issue. I reasoned that investors who may not be knowing details of this issue may have sold in better safe than sorry mode.
That being said, the bigger challenge of leadership transition remains for this stock.
This case seems very simple as per management commentary …But it might be the case that this 140cr odd deposit was actually cash of promoter only through any of the means say ‘black money’ and they should as a deposit so as to save Income tax on that whole amount. Now when RBI didn’t allow this, they should as a refund to the depositors… without any KYC etc thing
This was the case of sahara also … they created thousands of fake people without KYC … which inturn was black money of many corporates and political people
Read this 2012 article where shares were sold to repay Agro amount
About vp nandkumar
Detailed analysis by vijay Malik blog
Manappuram Agro matter was handled by vp nandkumar promptly in 2012
He sold the shares to pay money
He has discussed and disclosed it many times
Looks like from the disclosed information ,The way it was handled last week was bit out of the way ,
Doing business should be easy if someone is true
I feel court will favour the steps taken by vp nandkumar in 2012
I was listening to the audio recording of concall and I didn’t quite like this part :
Around 42mins into the call, When the CNBC tv 18 Analyst asks the MD if he purchased any Manappuram shares with the proceeds of the money raised… the MD fumbles to answer… he doesn’t answer straight away…
The analyst asks once again and all that MD has to reply is - when the money (except the pending 9lacs) is paid, this question doesn’t arise !
I got a feeling as if the MD is not so clean and clear as we want to believe he is…
What he was saying is that money taken was immediately returned by selling his shares
So where is the question about what he did with the money as he returned money
He also mentioned that it was used mainly for agricultural land
I too listened to the call and bought some today morning. In all his past interviews also he fumbles a lot so it’s nothing different this time.
He clearly said in one of the answers that all land purchased from the deposits are still present. 100 crore was returned via bank transfer and rest 50cr via cash since deposit amount was small. He was confident that names, phone numbers, signatures exist for all the depositors (KYC was not done). There is no inter-corporate borrowing with Manappuram Finance which is “ring-fenced”. Only risk is he being asked to step down if the allegations are proved.
Want to add one thought.
They had a firm called Margo. If they have taken money from public and used it for money laundering they where’s is depositors.
Money life have posted many articles against gold loan Compony. And not one or two many many such and completely against gold Companies. One such is Manappuram Finance Ltd.
Thought is if they had taken money why not a single news come out from the depositor itself. And as mentioned calculations above it could be 25k people how this many people will keep quiet without getting their money back.
And it is in Kerala also. Even a single person Remain will make news for a full month.
The first day I was also got Shocked. I keep a higher position in this.
But on a scale of 10 if I keep this news as a red flag 9 others are still green.
Good Dividend
Good RoE
GOO ROA
no aggressiveness. Which is needed in landing business.
Loan book is also diversified.
Good Credit Rating.
All new age concall, presentation, and updated governance.
At very low pe.
Gold is with them. So no need to worry about the default by customers.
10 Red Flag (in Dought still not clear)
Also the case is for 143cr. And it is belong to Promoter. And market cap is declined due to this news about 1500cr and above.
Same thing happened last year with the hero motor promoter. From them to until now I am still searching what happen after that. And no any charge sheet or he was convicted or not came out.
Good Opportunity.
And invested.
