Mahindra and mahindra Finance experiences a 5% decline in its shares following the postponement of earnings due to a fraud amounting to ₹150 crore. Mahindra & Mahindra Financial Services Ltd., a non-bank lender, disclosed on Monday night that an incident of fraud had been uncovered at one of its branches in the North East region. Consequently, the scheduled board meeting to review earnings for the January-March quarter, slated for today, has been deferred to a later date yet to be determined.
The fraud primarily involves retail vehicle loans distributed by the company, entailing forgery of KYC documents and the misappropriation of company funds. The discovery of this fraud took place during the January-March quarter, leading to the apprehension of several individuals involved, including an area business manager and other branch employees in the North East.
The company promptly reported the matter to the Reserve Bank of India’s central fraud monitoring cell and has initiated thorough investigations, currently in an advanced stage. Corrective measures have been identified and are being implemented at various levels.
Despite this setback, M&M Finance’s board meeting will proceed with discussions on proposals such as augmenting the aggregate borrowing limit and raising funds through NCD issuances.
The company’s shares are currently trading 4.5% lower on Tuesday at ₹266.15. Over the past year, shares of the non-bank lender have shown modest growth of close to 10%, although they have underperformed compared to most of their counterparts.